tcornelison

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66 Comments

    • Wed Nov 19th 09:51 AM | Rating: 0 0
      Commented on:
      The Economics and Ethics of Mortgage Default
      This is a sad commentary on what this nation has degenerated into. I am glad my father is not around to see this. I am disgusted by the continual discussions about walking away from your debts, your responsibilities and the suggestion that someone quit their job as a means to put pressure on a lender to lower the payment or principal balance. I am disgusted by a government that thinks it can fix deadbeats by lowering their payments.

      I read this morning that 25% of the modified loans are delinquent after the first payment beyond modification and 50% are delinquent after mulitiple payments. Why bother? Anyone who would consider this approach to the mortgage note they signed has no right to ever own a home again. In fact I have just bought some new appliances and will happily donate the boxes for their new home under the local interstate highway overpass. I hear they have lots of bridges in California.

      By the way, anytime the government offers you money, the collateral is your soul. It is hard much harder to walk away from that lien than it is to walk away from the mortgage.
      View article »
    • Wed Nov 19th 08:54 AM | Rating: 0 0
      Commented on:
      Solve the Housing Crisis by Rewarding the Prudent
      You are no different from the ones who want to reward those in default. Yes this could put cash back into the economy but the manpower to accomplish this would be enormous.
      1. It would take several years to process the loans.
      2. No one would want to participate because there is no profit to be made originating loans at below market prices.
      3. The cost would be staggering.
      4. The benefit would be extremely small in reality, my personal savings would be less than 1% in rate.
      5. It would destroy the entire mortgage industry because they would be dragged into a longterm welfare mortgage program for 93% of the population which doesn't want or need it.
      6. In the end the government would probably want a percentage ownership of your home, a percentage of the profits when you sell and your first born child.
      View article »
    • Thu Nov 13th 09:28 AM | Rating: +2 0
      Commented on:
      Prosecutors Going after Fraudulent Mortgage Borrowers
      The lender who encouraged fraud is also a criminal and should go to jail? If I encourage you to do something illegal and you do it, forgiving the actual offender is idiotic. Each party has personal responsibility and should stand to the charges on their own. The ignorance of the law defense doesn't even work in traffic court.

      By the way, credit reporting systems do not have income data and income and occupancy were the primary items lied about on applications. A "stated income" loan originated by the guidelines established by the lenders did not permit the loan officer to verify the information. If you verified the income, according to the program guidelines, the loan was not eligible for stated income processing. These rules were almost completely ignored but they were still the rules.


      On Nov 13 04:54 AM The hand wrote:

      > with todays credit verification systems, i personally fail to understand
      > why the lending agencies even ask for more than a ss number. when
      > the lender has this kind of power, i do not see legally how you can
      > hold the borrower accountable.
      >
      > the lenders did not do due diligence in entering into the loan agreements.
      > and that, my friends begs the bigger question - is it not obvious
      > that the lenders must have encouraged the borrowers to lie?
      >
      >
      >
      View article »
    • Mon Nov 10th 09:02 AM | Rating: +1 0
      Commented on:
      The Housing Solution No One Wants to Hear
      Why does everyone want to use our public funds (taxes the government has forcibly taken from the mortgage and tax paying citizens) to give aid to those deadbeat home occupants (home owners have an investment in the property they live in), mortgage servicers and Wall Street firms who created this mess. We can't fix bad debtors by bringing them current and lowering their rate. They will default anyway in 6-24 months regardless of what you do so why waste the money to keep them in the home.

      Take the TARP funds if we must have them at all and invest them as follows:

      1) purchase at below market bank foreclosure properties that will currently not sell at any price.
      2) contract for the completion, rehabilitation or improvement of these properties to reduce negative impact on surrounding homes.
      3) offer incentives, low fixed rate, etc. to willing buyers, whether owner occupants or investors
      3) sell what will sell and rent those that will not sell.

      In doing this you will put Americans (restrict to legal residents of US) to work doing the construction work and reduce the negative impacts of foreclosure activity on the communities by moving people back in. You will assist the qualified buyers who are willing to make an investment in the properties. The banks will indirectly benefit by selling non-performing assets albeit at significantly below book value. The economy can begin to recover for real and responsible homeownership will be supported. This type of recovery can be sustained and amounts to an investment in the future instead of a bailout of the past.

      Oh God...I forgot, they already spent most of that $700 Billion and have nothing to show for it other than larger banks at the top of the pile.
      View article »
    • Tue Oct 28th 09:05 AM | Rating: 0 0
      Commented on:
      No Hope for Homeowners? Foreclosure Prevention Program Falters
      The program is a disaster with a cost of credit almost 3% of above the current market rate for a loan. It is nothing but a government backed sub-prime mortgage that is doomed to the same failure as the one it replaces.

      For the Hand> the homebuyer in the neighborhood benefited from the same artificial inflation of the value of the home which the government wants to force the lenders to write down. Why should the government step in to protect their value when it is just as artificial as the value given to the neighbor's property.

      Let the bad loans made to people who can't afford them go the way they are destined to go eventually anyway. Let them fail. The market can then re-calculate the value of both homes. It is painful & it is distasteful but it is necessary and it is the fastest possible route to recovery.
      View article »
    • Tue Oct 28th 08:53 AM | Rating: 0 0
      Commented on:
      Real HOPE for Homeowners
      Did you know that the cost of credit under an H4H mortgage is over 9% in in a market where the market rate is below 6.500%. The typical Subprime loan from the 2006 market was around 9-10% so there is really no benefit to the program unless the owners' credit was so bad that they were in an 11+% loan and most of those will not make it no matter how much modification you give them.

      The write down portion of the program is an insult to every responsible homeowner out there who continues to pay their mortgage regardless of the Loan to Value. This program should be terminated before it can even get off the ground.

      IT WILL DO NOTHING EXCEPT PROLONG THE CRISIS WE ARE NOW IN.

      By the way, the lenders are not promoting this program and many, particularly wholesale lenders, are not participating at all. I get calls on the program every day but have no place to sell the loans even if they did make sense for anyone.
      View article »
    • Tue Oct 28th 08:31 AM | Rating: 0 0
      Commented on:
      On Rescuing Homeowners Undergoing Foreclosure
      Why can't the Administration, the Congress, the Treasury, the Federal Reserve and the "Candidates for the Presidency" see what you have pointed out in simple terms. I am a mortgage banker and this is precisely what I have been saying to anyone who will listen.

      McCain is wrong, Obama is wrong and Bush is wrong on the entire situation. There are good reasons why some people just should not own homes.

      They live week to week, paycheck to paycheck, save nothing and the slightest bump in the road, a furlough at work, a layoff, an illness, a surprise repair expense on the house or car, a child in trouble or some other fact of life hits them between the eyes and all of the sudden they can't pay their mortgage. Once they are behind they never catch up because they do not understand why someone isn't there to help them.

      There are some people in life who should just rent because it is all they are capable of managing. Some can't even manage that and we see them on the street with their cardboard boxes. It is not my responsibility to bail them out because they made poor life choices and refused to sacrifice anything in order to get what they want or work hard to keep it. I see people every day who make more money than I do yet have so little to show for it. They spend as thought the flow of income will never be interrupted even for a moment.
      View article »
    • Mon Oct 20th 09:21 AM | Rating: 0 0
      Commented on:
      Banks Should Forget the Moral Hazard for Now
      I have no problem with a lien holder/lender/servicer agreeing to modify a mortgage and accept a lower yield from the mortgage. I do have a problem with the government coming in and determining who gets it and who does not. This is the turning into the sinlge biggest social entitlement program in this Nation's history and both parties are buying into it. If they are using tax documentation to determine eligibility for the write down in payment and principal they will be helping the very criminals who committed fraud by overstating their income in order to qualify for the "liar loans."

      This is not a solution but it will certainly be the largest and fastest redistribution of wealth in the history of the new USSA. The Uneducated Socialist States of America. A high percentage of these borrowers will never make their payments regardless of how low you make the payments. You are removing the only club which ever forced them to pay anything and that is the threat of being dumped out on the street. Remove that threat and you are penalizing every honest hardworking citizen who pays their bills and rewarding the deadbeats of society in the worst move in history.

      I am a Republican but I recognize that the blind eye to this approaching storm was turned by my own Party with complicity from the Democrats as well. When John McCain came out in the 2nd debate talking about buying up votes, I mean bad mortgages, then modifying them so the homeowners could afford them. I walked out my front door, pulled up my McCain sign and threw it in the trash can. I had just listened to a "Republican" candidate for President propose the largest welfare program in history. If you think $300 Billion would cover it John, you are dreaming.

      We need to get the government out of the way and let these deadbeats lose their homes so we can reach the bottom and start over.
      View article »
    • Tue Oct 7th 09:08 AM | Rating: 0 0
      Commented on:
      Unintended Consequences - Fast Money Recap (10/6/08)
      I have flipped past it before but never listened for more than a few seconds. I won't even buy a used car from someone who yells on TV.

      This morning on Bloomberg I listened to a few minutes of analysis on why BofA needed to raise capital. Not one of them mentioned the $8.4 Billion predatory lending settlement they just entered into to get out of the Countrywide lawsuits. They haven't impressed me much either lately.
      View article »
    • Tue Oct 7th 08:59 AM | Rating: 0 0
      Commented on:
      Latest Mortgage Trends [Housing Tracker]
      As a mortgage lender I can tell you that the quote of the day is completely false, at least in markets where a market value can be determined.

      Some firms have completely stopped lending on Condos in Florida. Lenders have established very low benchmark credit scores (580) below which they will not lend. They are requiring a down payment. They are requiring documentation of income. They are, in short, going back to requiring applicants to prove they are qualified to handle homeownership. What a great idea.

      An applicant with good credit, 3-5% down payment and verifiable income that supports the payment can buy a home (unless it is a condo in Florida) with a loan from any lender in the nation. Beazer and other builders were major contributors to our problems since they owned the mortgage company, contracted exclusively with the attorney's and title companies to handle settlement, and exerted extraordinary influence over the appraisers since the appraiser was hired by the lender who was owned by the builder.

      We must strengthen RESPA, ban any kind of monetary agreements between builders, lenders, agents, appraisers, and settlement agents and enforce and reform TILA. We should require licensure of loan officers based on mandatory training and testing with continuing education requirements and hold employers 100% responsible for the actions ot their employees. This will force them to enact their own oversight procedures to identify and prevent fraud before the loan is made.

      Housing prices will correct and level themselves at an appropriate level in communities as soon as the Government quits intervening and allows those who cannot afford their homes to be foreclosed on. The banks will sell their property as soon as they see fit. If they have the assets to hold them for a longer period of time that is a decision their Board and management will have to make. I work for a bank and we sell as quickly as we can get a viable buyer.
      View article »
    • Fri Oct 3rd 08:20 AM | Rating: 0 0
      Commented on:
      Mortgages and Lending In The Subprime Meltdown [Housing Tracker]
      Real Estate Lending has been decimated by fraud which is easy to perpetrate with on-line lenders who do not know their applicant, the market they are lending in, the increasingly complex State regulations or the values in a particular area. This trend will end as quickly as it has taken hold especially as we rise out of this mess.

      Mortgage lending is best completed on a local basis where the understanding of value is not derived simply from photos and data on a page. The main problem with the ecomomy today is that common sense and the human factor was increasingly diminished in the lending process over the last 12 years. If we do not reverse this trend we will return to where we are today without a doubt but we will get there faster the next time around.
      View article »
    • Mon Sep 29th 09:12 AM | Rating: 0 0
      Commented on:
      Time Not for a Bailout, But for Nationalization
      Thank God you are no longer in the White House advising anyone!
      View article »
    • Mon Sep 29th 08:56 AM | Rating: 0 0
      Commented on:
      Did the FDIC Sabotage WaMu's Management and Erode Investor Confidence?
      WAMU was the #1 cause of WAMU's failure. Option ARM's markteted broadly to the entire mortgage market was foolish but WAMU, Wachovia, American Home Mortgage and others pushed these products like they were the Holy Grail of Mortgages. The product was very dangerous in the market segments they pushed it too and was doomed to failure from Day one. I have no sympathy for any of the lenders who sold this product to anyone other than the savvy investment property owner with 5+ years of experience as a landlord.
      View article »
    • Thu Sep 25th 09:18 AM | Rating: 0 0
      Commented on:
      Re-Invigorate Main Street, Instead of Bailing Out Wall Street
      There are no buyers for these securities because they are not whole loans but carved up high risk (now totally worthless) investment pieces of morggage pools which were worthless from the day they were created and went unsold. I repeat. They were worthless on day one when a buyer could not be found but they are still being declared as assets with a value. If we buy them with tax dollars it will be an almost dollar for dollar transfer to the national debt with no opportunity for return. I say force the holders of these "assets" to write them off and take the consequences. If the market crashes at least it will happen now and we can start over.

      Every other alternative simply prolongs this eventuality and perhaps makes it worse.
      View article »
    • Thu Sep 25th 08:55 AM | Rating: 0 0
      Commented on:
      Leverage 101: The Real Cause of the Financial Crisis
      Oversimplification is a dangerous thing. You completely ignored marketing costs in each scenario for the homebuyer which are typically 7-10% or more when a home is sold. This is why the buyer who financed 100% of the purchase and has no liquid assets is simply SOL when values stop rising.

      The problem is Fannie Mae, Freddie Mac, AIG and Wall Street all knew this but ignored it. They should have been smarter than the individual entering into this type of transaction for the first time in his life who is more worried about Clay Aiken being gay than he is about leverage and economic principles.
      View article »
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