Mortgage Loan approval hell

[paramount]

[quote=bearishgurl]

If a borrower can’t save 20% down, they don’t want to buy a property bad enough. [/quote]

And you know that how?

[ctr70]

Correction…lending has not gone back to the 90’s…it’s gone more back to the 1970’s!

Fha has been around since the 1930’s and is 3.5% down and has had low default rates. VA is 100% and been around since post WWII and has had low default rates. FHA are full income documentation throughly underwritten loans. You can not even begin to compare it with the toxic stuff that was happening from 2002-2007.

I saw a chart the other day that compared the performance of prime, subprime, alt a, fha, va over decades….really the stuff that got out of control and got us into trouble was subprime & alt a (stated income) from 2002-2007. It was really just 5-6 REALLY bad years of lending Wall Stree product that did it. And contrary to popular belief, the toxic loans were Wall Street products for the most part (not Gov loans Fannie, Freddie, FHA, VA). The underwriting guidelines were created by Morgan Stanley, Merril Lynch, Credit Suisse and JP Morgan & they created a secondary market for those loans.

FHA and VA have never had super high default rates. So it’s a myth that real estate “used to be” 20% down back in the day or it needs to be 20% down. FHA has never been 20% down and it’s been around since 1934.

What we are doing here is classic “throwing the baby out with the bathwater”. Lending standards are OVER-correcting in my opinion. For example, I know a guy with $5 million in the bank but could not show income on his tax returns so he can’t get a conventional loan even with 40% down. He has to buy cash. Now that is plan stupid. This is the kind of borrower “no income verification” loans were originally created for. Not the janitor in 2005 making $20k a year with no money in the bank buying stated income zero down.

I think 5% down and throughly underwritten FULL income documentation loan is plenty.

[ctr70]

Correction…lending has not gone back to the 90’s…it’s gone more back to the 1970’s!

Fha has been around since the 1930’s and is 3.5% down and has had low default rates. VA is 100% and been around since post WWII and has had low default rates. FHA are full income documentation throughly underwritten loans. You can not even begin to compare it with the toxic stuff that was happening from 2002-2007.

I saw a chart the other day that compared the performance of prime, subprime, alt a, fha, va over decades….really the stuff that got out of control and got us into trouble was subprime & alt a (stated income) from 2002-2007. It was really just 5-6 REALLY bad years of lending Wall Stree product that did it. And contrary to popular belief, the toxic loans were Wall Street products for the most part (not Gov loans Fannie, Freddie, FHA, VA). The underwriting guidelines were created by Morgan Stanley, Merril Lynch, Credit Suisse and JP Morgan & they created a secondary market for those loans.

FHA and VA have never had super high default rates. So it’s a myth that real estate “used to be” 20% down back in the day or it needs to be 20% down. FHA has never been 20% down and it’s been around since 1934.

What we are doing here is classic “throwing the baby out with the bathwater”. Lending standards are OVER-correcting in my opinion. For example, I know a guy with $5 million in the bank but could not show income on his tax returns so he can’t get a conventional loan even with 40% down. He has to buy cash. Now that is plan stupid. This is the kind of borrower “no income verification” loans were originally created for. Not the janitor in 2005 making $20k a year with no money in the bank buying stated income zero down.

I think 5% down and throughly underwritten FULL income documentation loan is plenty.

[ctr70]

Correction…lending has not gone back to the 90’s…it’s gone more back to the 1970’s!

Fha has been around since the 1930’s and is 3.5% down and has had low default rates. VA is 100% and been around since post WWII and has had low default rates. FHA are full income documentation throughly underwritten loans. You can not even begin to compare it with the toxic stuff that was happening from 2002-2007.

I saw a chart the other day that compared the performance of prime, subprime, alt a, fha, va over decades….really the stuff that got out of control and got us into trouble was subprime & alt a (stated income) from 2002-2007. It was really just 5-6 REALLY bad years of lending Wall Stree product that did it. And contrary to popular belief, the toxic loans were Wall Street products for the most part (not Gov loans Fannie, Freddie, FHA, VA). The underwriting guidelines were created by Morgan Stanley, Merril Lynch, Credit Suisse and JP Morgan & they created a secondary market for those loans.

FHA and VA have never had super high default rates. So it’s a myth that real estate “used to be” 20% down back in the day or it needs to be 20% down. FHA has never been 20% down and it’s been around since 1934.

What we are doing here is classic “throwing the baby out with the bathwater”. Lending standards are OVER-correcting in my opinion. For example, I know a guy with $5 million in the bank but could not show income on his tax returns so he can’t get a conventional loan even with 40% down. He has to buy cash. Now that is plan stupid. This is the kind of borrower “no income verification” loans were originally created for. Not the janitor in 2005 making $20k a year with no money in the bank buying stated income zero down.

I think 5% down and throughly underwritten FULL income documentation loan is plenty.

[ctr70]

Correction…lending has not gone back to the 90’s…it’s gone more back to the 1970’s!

Fha has been around since the 1930’s and is 3.5% down and has had low default rates. VA is 100% and been around since post WWII and has had low default rates. FHA are full income documentation throughly underwritten loans. You can not even begin to compare it with the toxic stuff that was happening from 2002-2007.

I saw a chart the other day that compared the performance of prime, subprime, alt a, fha, va over decades….really the stuff that got out of control and got us into trouble was subprime & alt a (stated income) from 2002-2007. It was really just 5-6 REALLY bad years of lending Wall Stree product that did it. And contrary to popular belief, the toxic loans were Wall Street products for the most part (not Gov loans Fannie, Freddie, FHA, VA). The underwriting guidelines were created by Morgan Stanley, Merril Lynch, Credit Suisse and JP Morgan & they created a secondary market for those loans.

FHA and VA have never had super high default rates. So it’s a myth that real estate “used to be” 20% down back in the day or it needs to be 20% down. FHA has never been 20% down and it’s been around since 1934.

What we are doing here is classic “throwing the baby out with the bathwater”. Lending standards are OVER-correcting in my opinion. For example, I know a guy with $5 million in the bank but could not show income on his tax returns so he can’t get a conventional loan even with 40% down. He has to buy cash. Now that is plan stupid. This is the kind of borrower “no income verification” loans were originally created for. Not the janitor in 2005 making $20k a year with no money in the bank buying stated income zero down.

I think 5% down and throughly underwritten FULL income documentation loan is plenty.

[ctr70]

Correction…lending has not gone back to the 90’s…it’s gone more back to the 1970’s!

Fha has been around since the 1930’s and is 3.5% down and has had low default rates. VA is 100% and been around since post WWII and has had low default rates. FHA are full income documentation throughly underwritten loans. You can not even begin to compare it with the toxic stuff that was happening from 2002-2007.

I saw a chart the other day that compared the performance of prime, subprime, alt a, fha, va over decades….really the stuff that got out of control and got us into trouble was subprime & alt a (stated income) from 2002-2007. It was really just 5-6 REALLY bad years of lending Wall Stree product that did it. And contrary to popular belief, the toxic loans were Wall Street products for the most part (not Gov loans Fannie, Freddie, FHA, VA). The underwriting guidelines were created by Morgan Stanley, Merril Lynch, Credit Suisse and JP Morgan & they created a secondary market for those loans.

FHA and VA have never had super high default rates. So it’s a myth that real estate “used to be” 20% down back in the day or it needs to be 20% down. FHA has never been 20% down and it’s been around since 1934.

What we are doing here is classic “throwing the baby out with the bathwater”. Lending standards are OVER-correcting in my opinion. For example, I know a guy with $5 million in the bank but could not show income on his tax returns so he can’t get a conventional loan even with 40% down. He has to buy cash. Now that is plan stupid. This is the kind of borrower “no income verification” loans were originally created for. Not the janitor in 2005 making $20k a year with no money in the bank buying stated income zero down.

I think 5% down and throughly underwritten FULL income documentation loan is plenty.

[bearishgurl]

[quote=paramount][quote=bearishgurl]

If a borrower can’t save 20% down, they don’t want to buy a property bad enough. [/quote]

And you know that how?[/quote]

Saving the downpayment shows motivation for purchasing RE, IMO.

I should probably rephrase the “want” part of it. Of course, the “desire” is always there. But it has to be followed up by the motivation to make it happen.

If the buyer doesn’t have 20% down for the property they “desire,” they may have 20% down for a for a lesser-expensive property. There are all kinds of ways to cut corners (expenses) on a daily, weekly and monthly basis and I have done and am doing all of them.

If “cutting corners” is not palatable or doable for a particular buyer in order to eventually obtain 20% down, then their sights are set too high for a property that is out of their league. It’s as simple as that.

I’m not saying I’m “perfect.” There are many folks who wouldn’t live with the sacrifices I have made and am making. Living on a shoestring isn’t for everyone.

There is nothing wrong with not wanting to do what it takes to obtain 20% down for a property you really want to buy. There is also nothing wrong with purchasing property that is not your ultimate “dream” home OR renting.

That’s the crux of the problem with those on the fence. Even if they are fully qualified NOW in every respect, the properties currently available in their price range are not what they “desire” and there is nothing wrong with that – absolutely nothing wrong with renting.

I’ve never looked at residential real estate as a “desire” or “lifestyle” thing. I’ve only considered suitability and location for my purposes in my past buying decisions, but that’s just me.

If I was in a position to make residential RE loans myself, I would not consider a borrower with less than 30% down and would have to agree with the appraisal as a condition of making the loan.

[bearishgurl]

[quote=paramount][quote=bearishgurl]

If a borrower can’t save 20% down, they don’t want to buy a property bad enough. [/quote]

And you know that how?[/quote]

Saving the downpayment shows motivation for purchasing RE, IMO.

I should probably rephrase the “want” part of it. Of course, the “desire” is always there. But it has to be followed up by the motivation to make it happen.

If the buyer doesn’t have 20% down for the property they “desire,” they may have 20% down for a for a lesser-expensive property. There are all kinds of ways to cut corners (expenses) on a daily, weekly and monthly basis and I have done and am doing all of them.

If “cutting corners” is not palatable or doable for a particular buyer in order to eventually obtain 20% down, then their sights are set too high for a property that is out of their league. It’s as simple as that.

I’m not saying I’m “perfect.” There are many folks who wouldn’t live with the sacrifices I have made and am making. Living on a shoestring isn’t for everyone.

There is nothing wrong with not wanting to do what it takes to obtain 20% down for a property you really want to buy. There is also nothing wrong with purchasing property that is not your ultimate “dream” home OR renting.

That’s the crux of the problem with those on the fence. Even if they are fully qualified NOW in every respect, the properties currently available in their price range are not what they “desire” and there is nothing wrong with that – absolutely nothing wrong with renting.

I’ve never looked at residential real estate as a “desire” or “lifestyle” thing. I’ve only considered suitability and location for my purposes in my past buying decisions, but that’s just me.

If I was in a position to make residential RE loans myself, I would not consider a borrower with less than 30% down and would have to agree with the appraisal as a condition of making the loan.

[bearishgurl]

[quote=paramount][quote=bearishgurl]

If a borrower can’t save 20% down, they don’t want to buy a property bad enough. [/quote]

And you know that how?[/quote]

Saving the downpayment shows motivation for purchasing RE, IMO.

I should probably rephrase the “want” part of it. Of course, the “desire” is always there. But it has to be followed up by the motivation to make it happen.

If the buyer doesn’t have 20% down for the property they “desire,” they may have 20% down for a for a lesser-expensive property. There are all kinds of ways to cut corners (expenses) on a daily, weekly and monthly basis and I have done and am doing all of them.

If “cutting corners” is not palatable or doable for a particular buyer in order to eventually obtain 20% down, then their sights are set too high for a property that is out of their league. It’s as simple as that.

I’m not saying I’m “perfect.” There are many folks who wouldn’t live with the sacrifices I have made and am making. Living on a shoestring isn’t for everyone.

There is nothing wrong with not wanting to do what it takes to obtain 20% down for a property you really want to buy. There is also nothing wrong with purchasing property that is not your ultimate “dream” home OR renting.

That’s the crux of the problem with those on the fence. Even if they are fully qualified NOW in every respect, the properties currently available in their price range are not what they “desire” and there is nothing wrong with that – absolutely nothing wrong with renting.

I’ve never looked at residential real estate as a “desire” or “lifestyle” thing. I’ve only considered suitability and location for my purposes in my past buying decisions, but that’s just me.

If I was in a position to make residential RE loans myself, I would not consider a borrower with less than 30% down and would have to agree with the appraisal as a condition of making the loan.

[bearishgurl]

[quote=paramount][quote=bearishgurl]

If a borrower can’t save 20% down, they don’t want to buy a property bad enough. [/quote]

And you know that how?[/quote]

Saving the downpayment shows motivation for purchasing RE, IMO.

I should probably rephrase the “want” part of it. Of course, the “desire” is always there. But it has to be followed up by the motivation to make it happen.

If the buyer doesn’t have 20% down for the property they “desire,” they may have 20% down for a for a lesser-expensive property. There are all kinds of ways to cut corners (expenses) on a daily, weekly and monthly basis and I have done and am doing all of them.

If “cutting corners” is not palatable or doable for a particular buyer in order to eventually obtain 20% down, then their sights are set too high for a property that is out of their league. It’s as simple as that.

I’m not saying I’m “perfect.” There are many folks who wouldn’t live with the sacrifices I have made and am making. Living on a shoestring isn’t for everyone.

There is nothing wrong with not wanting to do what it takes to obtain 20% down for a property you really want to buy. There is also nothing wrong with purchasing property that is not your ultimate “dream” home OR renting.

That’s the crux of the problem with those on the fence. Even if they are fully qualified NOW in every respect, the properties currently available in their price range are not what they “desire” and there is nothing wrong with that – absolutely nothing wrong with renting.

I’ve never looked at residential real estate as a “desire” or “lifestyle” thing. I’ve only considered suitability and location for my purposes in my past buying decisions, but that’s just me.

If I was in a position to make residential RE loans myself, I would not consider a borrower with less than 30% down and would have to agree with the appraisal as a condition of making the loan.

[bearishgurl]

[quote=paramount][quote=bearishgurl]

If a borrower can’t save 20% down, they don’t want to buy a property bad enough. [/quote]

And you know that how?[/quote]

Saving the downpayment shows motivation for purchasing RE, IMO.

I should probably rephrase the “want” part of it. Of course, the “desire” is always there. But it has to be followed up by the motivation to make it happen.

If the buyer doesn’t have 20% down for the property they “desire,” they may have 20% down for a for a lesser-expensive property. There are all kinds of ways to cut corners (expenses) on a daily, weekly and monthly basis and I have done and am doing all of them.

If “cutting corners” is not palatable or doable for a particular buyer in order to eventually obtain 20% down, then their sights are set too high for a property that is out of their league. It’s as simple as that.

I’m not saying I’m “perfect.” There are many folks who wouldn’t live with the sacrifices I have made and am making. Living on a shoestring isn’t for everyone.

There is nothing wrong with not wanting to do what it takes to obtain 20% down for a property you really want to buy. There is also nothing wrong with purchasing property that is not your ultimate “dream” home OR renting.

That’s the crux of the problem with those on the fence. Even if they are fully qualified NOW in every respect, the properties currently available in their price range are not what they “desire” and there is nothing wrong with that – absolutely nothing wrong with renting.

I’ve never looked at residential real estate as a “desire” or “lifestyle” thing. I’ve only considered suitability and location for my purposes in my past buying decisions, but that’s just me.

If I was in a position to make residential RE loans myself, I would not consider a borrower with less than 30% down and would have to agree with the appraisal as a condition of making the loan.

[sdrealtor]

There are people in this world far more upwardly mobile who want and have the motivation to make it happen but should not be subjected to those standards which are perfectly fine for people in other more stable situations. A blue collar worker or gov’t worker who does not have nearly certain higher income coming should meet those standards. A highly specialized physician who has sacrificed spending 4 yrs in college, 4 years in med school, a year in residency and then a few more in fellowship comes out with much educational debt but a mid 6 figure income. These people often have young families and have lived with sacrifices far beyond what you have made. Their time has come and there should be mortgage loans for them. If I was in the position making residential RE loans I would much rather lend to one of them than a minimally employed paralegal putting 30% but thats just me.

[sdrealtor]

There are people in this world far more upwardly mobile who want and have the motivation to make it happen but should not be subjected to those standards which are perfectly fine for people in other more stable situations. A blue collar worker or gov’t worker who does not have nearly certain higher income coming should meet those standards. A highly specialized physician who has sacrificed spending 4 yrs in college, 4 years in med school, a year in residency and then a few more in fellowship comes out with much educational debt but a mid 6 figure income. These people often have young families and have lived with sacrifices far beyond what you have made. Their time has come and there should be mortgage loans for them. If I was in the position making residential RE loans I would much rather lend to one of them than a minimally employed paralegal putting 30% but thats just me.

[sdrealtor]

There are people in this world far more upwardly mobile who want and have the motivation to make it happen but should not be subjected to those standards which are perfectly fine for people in other more stable situations. A blue collar worker or gov’t worker who does not have nearly certain higher income coming should meet those standards. A highly specialized physician who has sacrificed spending 4 yrs in college, 4 years in med school, a year in residency and then a few more in fellowship comes out with much educational debt but a mid 6 figure income. These people often have young families and have lived with sacrifices far beyond what you have made. Their time has come and there should be mortgage loans for them. If I was in the position making residential RE loans I would much rather lend to one of them than a minimally employed paralegal putting 30% but thats just me.

[sdrealtor]

There are people in this world far more upwardly mobile who want and have the motivation to make it happen but should not be subjected to those standards which are perfectly fine for people in other more stable situations. A blue collar worker or gov’t worker who does not have nearly certain higher income coming should meet those standards. A highly specialized physician who has sacrificed spending 4 yrs in college, 4 years in med school, a year in residency and then a few more in fellowship comes out with much educational debt but a mid 6 figure income. These people often have young families and have lived with sacrifices far beyond what you have made. Their time has come and there should be mortgage loans for them. If I was in the position making residential RE loans I would much rather lend to one of them than a minimally employed paralegal putting 30% but thats just me.

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