- This topic has 6 replies, 4 voices, and was last updated 17 years, 11 months ago by
contraman.
-
AuthorPosts
-
October 25, 2006 at 9:58 AM #7774October 25, 2006 at 1:57 PM #38422
powayseller
ParticipantCan you comment on the new lending guidelines? Have you read them, and how will it affect your business? Great to have you here on the forums!
October 25, 2006 at 2:07 PM #38424PerryChase
Participantpowayseller, you keep mentioning the new lending guidelines. However, it appears the it’s still business as usual. I’m not holding my breath for the tighter lending as there doesn’t seem to be any stomach to enforce them. I guess we’ll see tighter lending when we see it.
October 25, 2006 at 3:54 PM #38429contraman
ParticipantPS,
There are no lending guidelines unless they are enforced and banks are made to adhere to them. This is another part of the cycle right now. Here is what is happening:
Alot of smaller lenders are trying to pad their portfolio's so that they can get bought out by the bigger banks…Bear Stearns, Deutsche Bank, i.e. Every subprime lender is positioning right now for acquisition.
In the interim since originations are down they are getting even more aggressive in hopes to have good numbers on the books to raise their valuation. In turn, getting a higher premium for shareholders.
After this phase of the cycle and when the private investors start to really look at the quality of these loans and the NOD's start to rapidly increase, they will stop buying the mortgages and will demand a safer investment or lower LTV note to factor in falling prices.
This is when the banks due to demand will be forced by the private investor to tighten guidelines. Our government is a joke when it comes to this. Hell, it was Allen Greenspan who pushed the ARM to the American public to begin with…..you think he doesn't know about Option ARM's?
The question we should all be asking ourselves is who will be the scape goat when the proverbial stuff hits the fan and people can't afford their new reset payment next year.
Then they can't refinance because they bought with 100% financing in San Elijo Hills, and now the place, due to short sales and developer's fire sales on the final phases to get rid of the inventory appraises at 125% LTV. Anyone, want to invest in these loans?
The scapegoat will be us, the taxpayers….
It's all one big cycle and system. If you can figure it out you can make alot of money in life.
Sincerely, Contraman
October 25, 2006 at 4:03 PM #38431no_such_reality
ParticipantWhat are the interest rates and fees for the above loans?
What’s the rate on a 100% Stated/Stated witha 620?
Or the rate on the 100% No Doc with a 680?
October 25, 2006 at 8:26 PM #38446ParticipantThe new lending guidelines are in 2 phases:
1) first phase applies to federally regulated lenders (i.e. depository institutions), and those were released about 1-2 weeks ago. Ex: Citibank, Wells Fargo
2) second phase applies to state regulated lenders, and should be released within the next month. ex: Countrywide, Option One,Until phase 2 is completed, borrowers will go to state regulated brokers for loans, so you are *not* going to see any effect at all, until they are released.
It is only AFTER the state regulated lender guidelines are released, that the impact of these guidelines will be felt.
You are not seeing any impact now, because borrowers are going to Countrywide to get what they can no longer get from Citibank. Believe me, the depository institutions are anxious to level the playing field, so there is lots of pressure to get these guidelines out. The lady in charge of these guidelines said they would be released “very soon”. Only AFTER they are released will you see the impact. I hope I explained it better this time.
October 25, 2006 at 10:00 PM #38449ParticipantPS,
Don’t bet your cards on government regulation but rather on the buyer’s of this paper in the secondary market halting buying the portfolio’s laced with risky paper. Countrywide has more money than God and they have a lot of lobbyist in Washington so does HR Block (Option One).
Wells Fargo along with WAMU have just recently loosened their lending guidelines so take that as an example. The government barks, makes an example out of a few that don’t give money to election campaigns and then let’s business as usual take place.
If you don’t believe this look at the SEC and how they have handled corporate fraud and the back dating of options. It goes on and on and on and on just like the song…
Sincerely, Contraman
-
AuthorPosts
- You must be logged in to reply to this topic.