Subprime Loan Guidelines NEW

[PerryChase]

HLS, don’t think so much as an American. Think as a citizen of the world. You’ll feel much better.

You can only do what’s right for you and your family. Stick to that and you’ll be fine.

I drink room temperature water, no ice. People think I’m weird. It’s better for your digestion and better for your teeth (no dilatation and contraction that make your teeth more porous over time).

[HLS]

Ahhh Perry, Thank you.

It’s just that when I see masses of people in the world with so much less than most Americans, it is humbling.

I’m going to disconnect my icemaker right now. I’m so spoiled. When I was a kid I had to fill up the ice cube trays and carry them to the freezer.
Also had to get up to change the channel on the TV and actually answer the phone to find out who was calling.

Those were the good old days. 😉

[HLS]

Ahhh Perry, Thank you.

It’s just that when I see masses of people in the world with so much less than most Americans, it is humbling.

I’m going to disconnect my icemaker right now. I’m so spoiled. When I was a kid I had to fill up the ice cube trays and carry them to the freezer.
Also had to get up to change the channel on the TV and actually answer the phone to find out who was calling.

Those were the good old days. 😉

[SD Realtor]

HLS, when things go wrong if the market is left to cure itself, it usually will. The credit contraction is exactly what is needed to restore health to the market. The same people who are foreclosing now should have NEVER qualified for a home to begin with. There really is no harm in not buying a home if you cannot afford a home. In fact the strict measures would serve to protect the people that cannot think clearly for themselves, protect investors who invest in hedge funds that hold cdo’s and other similar instruments, protect taxpayers from having to fund bailouts….

All in all, I think it is a much better plan. The economic consequences that we will suffer are needed and in fact destined to happen. I am consistently harping about how harsh recessions are so I understand the ramifications of a credit contraction.

I don’t believe that a 5 year arm is in anyones best interest today.

SD Realtor

[SD Realtor]

HLS, when things go wrong if the market is left to cure itself, it usually will. The credit contraction is exactly what is needed to restore health to the market. The same people who are foreclosing now should have NEVER qualified for a home to begin with. There really is no harm in not buying a home if you cannot afford a home. In fact the strict measures would serve to protect the people that cannot think clearly for themselves, protect investors who invest in hedge funds that hold cdo’s and other similar instruments, protect taxpayers from having to fund bailouts….

All in all, I think it is a much better plan. The economic consequences that we will suffer are needed and in fact destined to happen. I am consistently harping about how harsh recessions are so I understand the ramifications of a credit contraction.

I don’t believe that a 5 year arm is in anyones best interest today.

SD Realtor

[Allan from Fallbrook]

HLS: Hey from a fellow Fallbrook resident!

I don’t think of America as an empire in the conventional (Roman, British, etc) sense of the word. While we certainly qualify from a military standpoint, our real influence has always been economic (at least since the end of WWII).

I also don’t think China is going to buy us. I remember the dominant thinking in the 1980s when Japan, Inc. reigned supreme and Japanese businesses were buying everything from Rockefeller Center to Pebble Beach. As it turns out, easy money financed that buying junket and the Japanese are still paying for it to this day.

The Chinese have a whole set of their own problems, the least of which is a heavily overheated economy. Their current political infrastructure stands at complete odds with a dynamic market economy, and at some point the free market entrepreneurs are going to run smack into the more doctrinaire hard line communists with some fairly unpleasant results.

I think we (America) are in for a rude and long overdue wake up call as regards fiscal responsibility and restraint. There have been quite a few clarion calls as far as the bottom falling out, but it never has. I think a fairly tough recession would really clean out the pipes and I don’t say that lightly or flippantly. It would come with a lot of pain and loss, but at this point it is necessary.

[Allan from Fallbrook]

HLS: Hey from a fellow Fallbrook resident!

I don’t think of America as an empire in the conventional (Roman, British, etc) sense of the word. While we certainly qualify from a military standpoint, our real influence has always been economic (at least since the end of WWII).

I also don’t think China is going to buy us. I remember the dominant thinking in the 1980s when Japan, Inc. reigned supreme and Japanese businesses were buying everything from Rockefeller Center to Pebble Beach. As it turns out, easy money financed that buying junket and the Japanese are still paying for it to this day.

The Chinese have a whole set of their own problems, the least of which is a heavily overheated economy. Their current political infrastructure stands at complete odds with a dynamic market economy, and at some point the free market entrepreneurs are going to run smack into the more doctrinaire hard line communists with some fairly unpleasant results.

I think we (America) are in for a rude and long overdue wake up call as regards fiscal responsibility and restraint. There have been quite a few clarion calls as far as the bottom falling out, but it never has. I think a fairly tough recession would really clean out the pipes and I don’t say that lightly or flippantly. It would come with a lot of pain and loss, but at this point it is necessary.

[HLS]

I’m not as unstable as I might appear. I’m not too concerned about me. It’s others that I truly worry about.

A 5 YR ARM is actually good for people who only plan on having their loan for a max of 6 years.
Many people have a goal of selling or leaving the area, based on age, kids, etc. it DOES serve a purpose for those who understand their options.

It’s not hard to figure out what the guaranteed savings is over the initial 5 years compared to a longer term loan, and it isn’t uncommon to save $15K-$25K, which more than offsets a higher payment in year 6 or maybe even 7.
If the plan is to stay in the loan longer than 6 years, of course it’s silly to gamble on a 5 YR ARM.

It is crazy to pay the 30 YR rate if you don’t need that security, so I respectfully disagree with your last line.

[HLS]

I’m not as unstable as I might appear. I’m not too concerned about me. It’s others that I truly worry about.

A 5 YR ARM is actually good for people who only plan on having their loan for a max of 6 years.
Many people have a goal of selling or leaving the area, based on age, kids, etc. it DOES serve a purpose for those who understand their options.

It’s not hard to figure out what the guaranteed savings is over the initial 5 years compared to a longer term loan, and it isn’t uncommon to save $15K-$25K, which more than offsets a higher payment in year 6 or maybe even 7.
If the plan is to stay in the loan longer than 6 years, of course it’s silly to gamble on a 5 YR ARM.

It is crazy to pay the 30 YR rate if you don’t need that security, so I respectfully disagree with your last line.

[SD Realtor]

HLS your premise is filled with speculation…

I do agree that for short term ownership/speculation, it absolutely makes sense from an investment standpoint. Very good point.

However from an investment standpoint at this point in time, it is quite speculative to say that a property will be more valuable in that 5 years. The most common misconception about a market decline is the appreciation rate on the bottom of the cycle.

Yet yes, your point is well taken about the investment strategy to lower carrying costs, and for that you are definitely correct.

Unfortunately many homewowners are not in that boat and get misguided thinking that they will have a markedly higher salary, or the market will change so they can refinance. Basically they get hoodwinked.

This is much more the norm. Wouldn’t you agree?

SD Realtor

[SD Realtor]

HLS your premise is filled with speculation…

I do agree that for short term ownership/speculation, it absolutely makes sense from an investment standpoint. Very good point.

However from an investment standpoint at this point in time, it is quite speculative to say that a property will be more valuable in that 5 years. The most common misconception about a market decline is the appreciation rate on the bottom of the cycle.

Yet yes, your point is well taken about the investment strategy to lower carrying costs, and for that you are definitely correct.

Unfortunately many homewowners are not in that boat and get misguided thinking that they will have a markedly higher salary, or the market will change so they can refinance. Basically they get hoodwinked.

This is much more the norm. Wouldn’t you agree?

SD Realtor

[HLS]

YES, we are on the same page.

This entire site is speculation, based on some facts.
I don’t KNOW what values will be in 5 years.

People definitely get misguided by loan thieves.
There are way too many myths about mortgage loans.

Many/Most people in lending biz are financially ignorant and don’t really have a clue what is best for the borrower.
They cannot explain options to the client or the pros and cons of a loan. They are sales people only trying to make money for them, regardless of what’s best for the borrower.

They DO know that they can get the largest commission possible by selling the low payment of the option arm loan. They also know that they can make more money by charging the borrower “just a half-point” more than they should.

People who tell me that they had 700+ scores and knew they wanted to be in the property long term, yet were sold a 2 YR ARM, with the promise of a “free” refi in 2 years. It’s a disgrace. The stories are true, and are endless.

I believe that the vast majority of borrowers are in the wrong loan for their situation OR paid too much in rate or fees. There are honest, ethical people in the industry, but it’s hard to find them. It’s a rogues gallery.

More people get outright screwed by friends and family on loans than you would think. It’s also a falacy that going directly to a large bank gets the best loan. It may be, but not necessarily.

I give people straight answers and options and explanations beyond what they even knew possible. It’s their decision, not mine.
The 10YR ARM provides many people the security that they need, however they choose the 30YR fixed. It’s expensive insurance.
It doesn’t matter to me, I just want them to know their options.

[HLS]

YES, we are on the same page.

This entire site is speculation, based on some facts.
I don’t KNOW what values will be in 5 years.

People definitely get misguided by loan thieves.
There are way too many myths about mortgage loans.

Many/Most people in lending biz are financially ignorant and don’t really have a clue what is best for the borrower.
They cannot explain options to the client or the pros and cons of a loan. They are sales people only trying to make money for them, regardless of what’s best for the borrower.

They DO know that they can get the largest commission possible by selling the low payment of the option arm loan. They also know that they can make more money by charging the borrower “just a half-point” more than they should.

People who tell me that they had 700+ scores and knew they wanted to be in the property long term, yet were sold a 2 YR ARM, with the promise of a “free” refi in 2 years. It’s a disgrace. The stories are true, and are endless.

I believe that the vast majority of borrowers are in the wrong loan for their situation OR paid too much in rate or fees. There are honest, ethical people in the industry, but it’s hard to find them. It’s a rogues gallery.

More people get outright screwed by friends and family on loans than you would think. It’s also a falacy that going directly to a large bank gets the best loan. It may be, but not necessarily.

I give people straight answers and options and explanations beyond what they even knew possible. It’s their decision, not mine.
The 10YR ARM provides many people the security that they need, however they choose the 30YR fixed. It’s expensive insurance.
It doesn’t matter to me, I just want them to know their options.

[Author]

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