I agree with your comments re mortgage brokers, the real problem is they have no fiscal duty to the buyer.
I do not agree with you that the cause is social engineering and greed. With that being said, I'll point out you neglected to mention developers, investment bankers and campaign finance as causes for the housing crisis.
Economics degree is not needed to know that building houses to sell at $250,000-$550,000 leaves out most folks whose income qualifies them to buy $100,000 to $150,000
I think at one point it was easier to buy a home than get a credit card. We actually offered a program called a NINJA loan. (No Income,No Job, No Asset) verification loans. Essentially the mortgage application except for name address, and social was blank.
You didn't quite get it. What happened was that house flippers in neg am loans got stuck holding houses when gas and food prices when up. They started dropping prices to encourage buyers but there were none. They started going into foreclosure. That brought down prices in the neighborhood. Other people that had ARMs and little equity soon were unable to refi at the lower value. They then went into foreclosure. Now, it's a dominoe effect. BTW, NINJA loans required exceptional credit history.
Um well,you are welcome to your opinion, however what ever the reason the borrower had be it a non owner occupied, second home, or a flip, someone had to furnish the tools to enable this. One Chicago based Alt A lender permitted 80/20 NINJA combo loans down to a 620 FICO, which is anything else but exceptional credit. The reality is everyone from the borrower all the way up the "food" chain had a stake in this mess.
Let me tell you a story. I got a call from a doctor. Bought a house in Cali worth $1.5 mil for $1.2 mil. He took the 5 yr. ARM that Greenspan said was good. 2 years later, the house was worth $925K. To refi he has to produce the difference on the spot. I can't lend more money than the house is worth. He went into foreclosure. Bad borrower? What do you think?
if you want to save money pay cash your money no credit no fees
amsmarket1 3 years ago
I agree with your comments re mortgage brokers, the real problem is they have no fiscal duty to the buyer.
I do not agree with you that the cause is social engineering and greed. With that being said, I'll point out you neglected to mention developers, investment bankers and campaign finance as causes for the housing crisis.
Economics degree is not needed to know that building houses to sell at $250,000-$550,000 leaves out most folks whose income qualifies them to buy $100,000 to $150,000
bleupeony 3 years ago
Comment removed
Kni7es 3 years ago
Seems like they went to the same level as credit card companies.
dragonballjiujitsu 3 years ago
I think at one point it was easier to buy a home than get a credit card. We actually offered a program called a NINJA loan. (No Income,No Job, No Asset) verification loans. Essentially the mortgage application except for name address, and social was blank.
FrugalTech 3 years ago
You didn't quite get it. What happened was that house flippers in neg am loans got stuck holding houses when gas and food prices when up. They started dropping prices to encourage buyers but there were none. They started going into foreclosure. That brought down prices in the neighborhood. Other people that had ARMs and little equity soon were unable to refi at the lower value. They then went into foreclosure. Now, it's a dominoe effect. BTW, NINJA loans required exceptional credit history.
Gergis421 3 years ago
Um well,you are welcome to your opinion, however what ever the reason the borrower had be it a non owner occupied, second home, or a flip, someone had to furnish the tools to enable this. One Chicago based Alt A lender permitted 80/20 NINJA combo loans down to a 620 FICO, which is anything else but exceptional credit. The reality is everyone from the borrower all the way up the "food" chain had a stake in this mess.
FrugalTech 3 years ago
Let me tell you a story. I got a call from a doctor. Bought a house in Cali worth $1.5 mil for $1.2 mil. He took the 5 yr. ARM that Greenspan said was good. 2 years later, the house was worth $925K. To refi he has to produce the difference on the spot. I can't lend more money than the house is worth. He went into foreclosure. Bad borrower? What do you think?
Gergis421 3 years ago
You nailed it!
Thanks Bruce, keep the good work.
snoodle79 3 years ago
Thanks!
FrugalTech 3 years ago