Posted by PJM/MI on 3/15/07 8:55pm
Msg #180135

On Point radio show..Subprime lenders

Interesting program tonight that aired out of Boston (WBUR radio). Program was all on subprime lenders and the problems they have caused in the housing market. (For those who know me..yea.. I sent 'em an email).
A woman called in and told how she "didn't know"what she was signing! I was HOT over that one! I keep reading/hearing of borrowers saying, "I didn't know". HUH? Who the heck was the closing agent or title co? And what about the set of documents left with them? I don't want any of US to be scapegoats on THIS bandwagon.
Seems EVERYBODY wants to blame this problem on the lenders and now they are shouting for REGULATIONS in the mortgage world.
It'll be quite interesting to see what's really going to happen.

Reply by Larry/Ca on 3/15/07 9:25pm
Msg #180142

true some don't know....

or care. Many tell me they will be refinancing again soon, long before payments are impossible. That was in better times. I don't know how anyone can afford to play that game with the ole homestead.

Reply by Dorothy_MI on 3/15/07 10:38pm
Msg #180145

And if the prediction comes true

about the Real Estate bubble bursting in some areas by 40%, they won't have any equity to draw on and won't be able to refi and will be stuck with the high interest payments (if they can even make them).

To illustrate: Last week I closed for a man who has moved his business out of state (we hear a lot about that these days in MI, but that's another long story). Anyway he had a 4.75% fixed 30 on his house in one of the more sought after suburbs of Detroit (a very, very nice middle class town). He had gotten a divorce, couldn't sell the house (had been on the market for a year) and had to get his wife off the note, therefore he had no choice but to refi. He got a 7.25% fixed 30 but the worse part was that because of the slow housing market here in MI, the amount needed to pay off the mortgage was over the 80% LTV. That's how much the appraisal had gone down. So he was also stuck with PMI. The 4.75% was the rate about 4-1/2 - 5 years ago here, so in that time, his house had gone down that much in value. He told me if I heard of anyone who was looking for a house in that town that they could buy it for the amount owed! Very sad.

Reply by Susan Fischer on 3/15/07 10:57pm
Msg #180149

Holy Moley. And the sharks circle in... n/m

Reply by MistarellaFL on 3/16/07 10:37am
Msg #180190

Re: true some don't know....

But I think most DO know.
How many 2/28 ARM's have I signed, where the brw spent alot of time and energy explaining to me how this was the best deal for him right now, and would be spending the next few years repairing his credit, yada, yada, yada. Then I show up in 2 more years and he is refi'ing again, and the C/C's that were paid off 2 years ago are maxed out again, and he is getting another ARM to get out of it again. That can't go on forever....
I am sure there are some folks who were hornswaggled, but I think the majority were not.
Just an opinion.

Reply by Charles_Ca on 3/15/07 11:34pm
Msg #180155

Re: On Point radio show..Subprime lenders ~ Please....

they now prefer to be called Non-prime. If it looks like a duck and it quacks like a duck... I've never seen an industry react to a beating quicker

Reply by Susan Fischer on 3/15/07 11:44pm
Msg #180157

A Sub by any other name... n/m

Reply by NCLisa on 3/16/07 6:23am
Msg #180163

Just remember regulations on MB vary from state to state. Here in NC, all you need to do is take a 6 hour class and that is it.

Many of these people have no clue as to what they are getting into. They believe what their broker tells them, and that is that. They don't understand the product, and they can't believe that the person on the phone would get them into something that could cause more harm than good. As a former EO, RE Paralegal, and a current NSA, it has never been my job to explain the terms of the loan to the borrower. A RE Attorney doesn't even do that. It is the lender that explains the loan product to the borrower, and is supposed to make sure they know what they are getting into.

You think what you see as an NSA is bad, try working as an EO or RE Paralegal for an attorney or TC branch that does nothing but work with subprime lenders. It's a nightmare! 1/2 of the loans don't close. You make sure title is clear, etc, but if there is a problem, you have greedy brokers calling begging you to overlook something, that you can't. You get to hear all the stuff you know is just wrong that they do to make the loans go through. I knew for a fact that one MB had forged his wife's name on a set of loan docs and had a friend notarize it. The attorney was ok with it, I left the law firm and went straight to the NC State Bar, and they didn't care.

Reply by JanelWI on 3/16/07 9:13am
Msg #180178

Everyone is right. The only reason this takes place in my opinion is that you rarely find lenders in general giving the pros and cons of each loan product they try to sell to people. If they painted the dark side....well we all know what happens. People may think twice before they jump in. It is still up to the individual. Most people don't ask either. You can not be mislead unless you are uninformed, you cannot be uninformed unless you put your total trust in another and at that you better darn well be sure they have your best interest at heart. Do borrowers really think a Lender is going to serve them up the truth on a gold platter?? Please! Some people choose to be uninformed, turn a blind eye and hope for the best. Complacency at its finest. We live in a world of constant distraction and some people choose to believe everything they hear rather than using their own mind. Are you going to THINK today or are you a constant BELIEVER. Careful balance is required between the two. So much of what we hear and see today is presented to us from a certain point of view, if you do not have the strength and the tools to navigate this; you run the risk of being vulnerable. Lenders know this very well and they are now paying for it. There is no easy road. It is an unfortunate fact of life that most people don't want to make waves, believe everything they hear, compromise their integrity for the sake of going with the flow. Another unfortunate fact is that many are affected by this kind of behavior on ends, Lender and consumer. Not to mention the many other facets of life where this behavior also applies. People need to realize there is no more room for turning a blind eye.

Reply by Susan Fischer on 3/16/07 11:24am
Msg #180198

All that and what SueW said about our being an "instant gratification" society...the need to have the newest, fastest, biggest, most powerful everything...and right now! Saving for the future is a lost value and owning the deed to the ranch is a luxury for the rich. The power of advertising vs. the consequences of living beyond our means - from individuals to the nation (look at the National Debt,) plus the Profit before People tenent of unfettered capitalism have changed the landscape of a sustainable economy.

If Americans are bereft of a thriving middle class, then we have become a nation of consumers, producing nothing but debt for the masses and wealth for the few. A sad and tragic legacy.