http://sacrealstats.blogspot.com/2006/11/how-can-they-afford...
I was looking up something on impound accounts and came across this blog. Caught my interest because was about my city. I read it and was not surprised by the least.
But I think this is the perfect example. Is it the lender's fault or the buyers? I don't have much sympathy for a buyer who did not read the paperwork and who bought a home for 8 times their income. Duh. But the lender is most definitely a shady bastard. & of course will likely get away with this scot free. That is just not right. The bank and the lender will get their money most likely. The buyer will be left holding the bag. Even if the bank/lender loses this one, oh well, they made enough off of all these insane loans. Not too worried about them.
Mortgage brokers work for a commission. I have a friend who is a broker but and overall is a standup guy. But he is big on undocumented loans. He has pushed the boundaries a bit since a lot of his business is small business owners, new, with no income. But he still gets the loans. HE has asked me to fudge letters saying these people have been in business 2 full tax years (Which is the rule). No way in hell I want a prt of that.
I don't think he would do anything near this shady. But all the same I would never trust a mortgage broker in the least, not even a friend. You have to protect yourself, because no one else will. When it comes down to it their livelihood depends on how many (& how big) the mortgages they sell.
Of course most of the people I know are looking at houses in the $400k range with a $60-$70k income and I think they are absolutely insane. This blog takes it to a whole new level. Then again I have an acquaintance who thinks she is rich and has arrived because they bought a McMAnsion in a gated community. She got a 2nd full-time job and still can't pay the bills. Now you have to wonder if they even went fixed or not - maybe they are paying interest only - who knows. Never even thought about that. I just find it how ironic she brags about arriving - when clear to everyone else all she has arrived into is something way over her head.
Anyway, my head is still reeling at the thought of a $4700 monthly payment. Yikes!!!!!
Doesn't look like a sub-prime loan but I have had friends who make $60k/year that were eligible for a $400k sub-prime loan (the interest rates on those are insane). It's all in the same realm - the sub-prime factor just makes it that much worse. But the undocumented loans will have similar failings for many who suffer hardship or easily got in over their head. Or more like this case even, simply major fudging of numbers to qualify for twice as much as you probably should.
-------------------------------------
Oh yeah - as much as I am for home ownership, I also wouldn't have considered buying a home for less than 20% down. If people had to put money down, even just 5% or something, a lot of these current problems would not be surfacing so heavily and so fast. Just saw another wise article on the subject of not getting in over your head. As much as I Am pro-home-ownership. The flip side holds just as true - don't do it until youa re ready!
http://www.dallasnews.com/sharedcontent/dws/bus/columnists/p...
I was looking up something on impound accounts and came across this blog. Caught my interest because was about my city. I read it and was not surprised by the least.
But I think this is the perfect example. Is it the lender's fault or the buyers? I don't have much sympathy for a buyer who did not read the paperwork and who bought a home for 8 times their income. Duh. But the lender is most definitely a shady bastard. & of course will likely get away with this scot free. That is just not right. The bank and the lender will get their money most likely. The buyer will be left holding the bag. Even if the bank/lender loses this one, oh well, they made enough off of all these insane loans. Not too worried about them.
Mortgage brokers work for a commission. I have a friend who is a broker but and overall is a standup guy. But he is big on undocumented loans. He has pushed the boundaries a bit since a lot of his business is small business owners, new, with no income. But he still gets the loans. HE has asked me to fudge letters saying these people have been in business 2 full tax years (Which is the rule). No way in hell I want a prt of that.
I don't think he would do anything near this shady. But all the same I would never trust a mortgage broker in the least, not even a friend. You have to protect yourself, because no one else will. When it comes down to it their livelihood depends on how many (& how big) the mortgages they sell.
Of course most of the people I know are looking at houses in the $400k range with a $60-$70k income and I think they are absolutely insane. This blog takes it to a whole new level. Then again I have an acquaintance who thinks she is rich and has arrived because they bought a McMAnsion in a gated community. She got a 2nd full-time job and still can't pay the bills. Now you have to wonder if they even went fixed or not - maybe they are paying interest only - who knows. Never even thought about that. I just find it how ironic she brags about arriving - when clear to everyone else all she has arrived into is something way over her head.
Anyway, my head is still reeling at the thought of a $4700 monthly payment. Yikes!!!!!
Doesn't look like a sub-prime loan but I have had friends who make $60k/year that were eligible for a $400k sub-prime loan (the interest rates on those are insane). It's all in the same realm - the sub-prime factor just makes it that much worse. But the undocumented loans will have similar failings for many who suffer hardship or easily got in over their head. Or more like this case even, simply major fudging of numbers to qualify for twice as much as you probably should.
-------------------------------------
Oh yeah - as much as I am for home ownership, I also wouldn't have considered buying a home for less than 20% down. If people had to put money down, even just 5% or something, a lot of these current problems would not be surfacing so heavily and so fast. Just saw another wise article on the subject of not getting in over your head. As much as I Am pro-home-ownership. The flip side holds just as true - don't do it until youa re ready!
http://www.dallasnews.com/sharedcontent/dws/bus/columnists/p...
March 21st, 2007 at 05:35 pm 1174498518
March 21st, 2007 at 06:14 pm 1174500861
Yes the loan guy was a crook, but geez, people, read before you sign on that dotted line.
March 21st, 2007 at 07:04 pm 1174503865
March 21st, 2007 at 07:38 pm 1174505909
March 21st, 2007 at 09:08 pm 1174511301
So I have no idea why a 2-income $80k/year family would even consider building their own home like that. Not when it is not even needed to get into a nice house in a nice neightborhood. Extra insane. It's beyond the level I usually see.