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SD Realtor.
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December 2, 2007 at 12:48 AM #107308December 2, 2007 at 9:09 AM #107256
SD Realtor
ParticipantYeah Breeze –
“If you’re talking about realtors and mortgage brokers, I agree with the first part”
Statements like that show your proclivity to be narrowminded and place the blame on just one narrow part of a very widespread problem.
Statements like that pretty much put you in the same boat with others who are of the same ilk.
SD Realtor
December 2, 2007 at 9:09 AM #107351ParticipantYeah Breeze –
“If you’re talking about realtors and mortgage brokers, I agree with the first part”
Statements like that show your proclivity to be narrowminded and place the blame on just one narrow part of a very widespread problem.
Statements like that pretty much put you in the same boat with others who are of the same ilk.
SD Realtor
December 2, 2007 at 9:09 AM #107385ParticipantYeah Breeze –
“If you’re talking about realtors and mortgage brokers, I agree with the first part”
Statements like that show your proclivity to be narrowminded and place the blame on just one narrow part of a very widespread problem.
Statements like that pretty much put you in the same boat with others who are of the same ilk.
SD Realtor
December 2, 2007 at 9:09 AM #107389ParticipantYeah Breeze –
“If you’re talking about realtors and mortgage brokers, I agree with the first part”
Statements like that show your proclivity to be narrowminded and place the blame on just one narrow part of a very widespread problem.
Statements like that pretty much put you in the same boat with others who are of the same ilk.
SD Realtor
December 2, 2007 at 9:09 AM #107410ParticipantYeah Breeze –
“If you’re talking about realtors and mortgage brokers, I agree with the first part”
Statements like that show your proclivity to be narrowminded and place the blame on just one narrow part of a very widespread problem.
Statements like that pretty much put you in the same boat with others who are of the same ilk.
SD Realtor
December 2, 2007 at 3:57 PM #107492ucodegen
ParticipantMy belief is not that eradicating non recourse will solve the problem and my apologies for not conveying it properly.
I would have to disagree with you on this (eradicating non-recourse part of the statement). We got into this problem with the banks/loan originators feeling that the increasing property value would cover any loss even with the fact that the loans were non-recourse. The property would give them back their money on foreclosure. The lenders made the bad assumption that the current rate of property appreciation would continue unabated. Making loans recourse means that all loans have the potential to return the money to the lender, continuing the problem.
For responsible lending to exist, the lenders have to realize that they can loose their skin in the game, not just the borrower. This way, the lender will be forced to do their due diligence.No doubt adding curbs, regulation to the lending and institutional side of the equation will be most helpful.
I think this would be the most useful, and on more than just the lending side of the equation. I want to see legal regulations along the lines of series 3 and 7 SEC licenses for real estate agents, brokers and mortgage brokers (same with the disciplinary portion) I would also like to see LTV restrictions on loans much like the margin restrictions for stocks (Though not necessarily at the same %LTV weighting. Houses and stocks are both assets)December 2, 2007 at 3:57 PM #107586ParticipantMy belief is not that eradicating non recourse will solve the problem and my apologies for not conveying it properly.
I would have to disagree with you on this (eradicating non-recourse part of the statement). We got into this problem with the banks/loan originators feeling that the increasing property value would cover any loss even with the fact that the loans were non-recourse. The property would give them back their money on foreclosure. The lenders made the bad assumption that the current rate of property appreciation would continue unabated. Making loans recourse means that all loans have the potential to return the money to the lender, continuing the problem.
For responsible lending to exist, the lenders have to realize that they can loose their skin in the game, not just the borrower. This way, the lender will be forced to do their due diligence.No doubt adding curbs, regulation to the lending and institutional side of the equation will be most helpful.
I think this would be the most useful, and on more than just the lending side of the equation. I want to see legal regulations along the lines of series 3 and 7 SEC licenses for real estate agents, brokers and mortgage brokers (same with the disciplinary portion) I would also like to see LTV restrictions on loans much like the margin restrictions for stocks (Though not necessarily at the same %LTV weighting. Houses and stocks are both assets)December 2, 2007 at 3:57 PM #107621ParticipantMy belief is not that eradicating non recourse will solve the problem and my apologies for not conveying it properly.
I would have to disagree with you on this (eradicating non-recourse part of the statement). We got into this problem with the banks/loan originators feeling that the increasing property value would cover any loss even with the fact that the loans were non-recourse. The property would give them back their money on foreclosure. The lenders made the bad assumption that the current rate of property appreciation would continue unabated. Making loans recourse means that all loans have the potential to return the money to the lender, continuing the problem.
For responsible lending to exist, the lenders have to realize that they can loose their skin in the game, not just the borrower. This way, the lender will be forced to do their due diligence.No doubt adding curbs, regulation to the lending and institutional side of the equation will be most helpful.
I think this would be the most useful, and on more than just the lending side of the equation. I want to see legal regulations along the lines of series 3 and 7 SEC licenses for real estate agents, brokers and mortgage brokers (same with the disciplinary portion) I would also like to see LTV restrictions on loans much like the margin restrictions for stocks (Though not necessarily at the same %LTV weighting. Houses and stocks are both assets)December 2, 2007 at 3:57 PM #107634ParticipantMy belief is not that eradicating non recourse will solve the problem and my apologies for not conveying it properly.
I would have to disagree with you on this (eradicating non-recourse part of the statement). We got into this problem with the banks/loan originators feeling that the increasing property value would cover any loss even with the fact that the loans were non-recourse. The property would give them back their money on foreclosure. The lenders made the bad assumption that the current rate of property appreciation would continue unabated. Making loans recourse means that all loans have the potential to return the money to the lender, continuing the problem.
For responsible lending to exist, the lenders have to realize that they can loose their skin in the game, not just the borrower. This way, the lender will be forced to do their due diligence.No doubt adding curbs, regulation to the lending and institutional side of the equation will be most helpful.
I think this would be the most useful, and on more than just the lending side of the equation. I want to see legal regulations along the lines of series 3 and 7 SEC licenses for real estate agents, brokers and mortgage brokers (same with the disciplinary portion) I would also like to see LTV restrictions on loans much like the margin restrictions for stocks (Though not necessarily at the same %LTV weighting. Houses and stocks are both assets)December 2, 2007 at 3:57 PM #107648ParticipantMy belief is not that eradicating non recourse will solve the problem and my apologies for not conveying it properly.
I would have to disagree with you on this (eradicating non-recourse part of the statement). We got into this problem with the banks/loan originators feeling that the increasing property value would cover any loss even with the fact that the loans were non-recourse. The property would give them back their money on foreclosure. The lenders made the bad assumption that the current rate of property appreciation would continue unabated. Making loans recourse means that all loans have the potential to return the money to the lender, continuing the problem.
For responsible lending to exist, the lenders have to realize that they can loose their skin in the game, not just the borrower. This way, the lender will be forced to do their due diligence.No doubt adding curbs, regulation to the lending and institutional side of the equation will be most helpful.
I think this would be the most useful, and on more than just the lending side of the equation. I want to see legal regulations along the lines of series 3 and 7 SEC licenses for real estate agents, brokers and mortgage brokers (same with the disciplinary portion) I would also like to see LTV restrictions on loans much like the margin restrictions for stocks (Though not necessarily at the same %LTV weighting. Houses and stocks are both assets)December 2, 2007 at 4:08 PM #107503ParticipantYou are all missing the point; even if you kept your nose clean and only made loans to people with 800 credit scores with 20% down, the underlying value of the assets that you lent on have been severely affected by your competitors.
Not if you didn’t use inflated appraisals and used your own appraiser as a bank. Banks make money two ways on a loan. They make it on the carry spread (difference between the cost of the money they are lending out and the amount they charge) for the loans they keep and they make it on finance fees and securitization charges on the ones they sell.
A lender has every right to refuse to lend $400,000 on a $500,000 property because they feel the underlying value is really $350,000. They don’t have to follow the ‘crowd’. Let some other lender take the risk. Unfortunately they got greedy and picked up those loans; promptly securitizing them, labeling them AAA and selling them to get rid of the risk. The lenders (many, not all) forgot that by law, if they misstate the risk or fundimentals on the CDO/MBSs, the originating lender can be forced to repurchase the securitized loan package. The lenders that did not forget about the law formed wholly owned subsidiaries to funnel the money through, using the corporate shield to protect themselves from liability.
December 2, 2007 at 4:08 PM #107598ParticipantYou are all missing the point; even if you kept your nose clean and only made loans to people with 800 credit scores with 20% down, the underlying value of the assets that you lent on have been severely affected by your competitors.
Not if you didn’t use inflated appraisals and used your own appraiser as a bank. Banks make money two ways on a loan. They make it on the carry spread (difference between the cost of the money they are lending out and the amount they charge) for the loans they keep and they make it on finance fees and securitization charges on the ones they sell.
A lender has every right to refuse to lend $400,000 on a $500,000 property because they feel the underlying value is really $350,000. They don’t have to follow the ‘crowd’. Let some other lender take the risk. Unfortunately they got greedy and picked up those loans; promptly securitizing them, labeling them AAA and selling them to get rid of the risk. The lenders (many, not all) forgot that by law, if they misstate the risk or fundimentals on the CDO/MBSs, the originating lender can be forced to repurchase the securitized loan package. The lenders that did not forget about the law formed wholly owned subsidiaries to funnel the money through, using the corporate shield to protect themselves from liability.
December 2, 2007 at 4:08 PM #107631ParticipantYou are all missing the point; even if you kept your nose clean and only made loans to people with 800 credit scores with 20% down, the underlying value of the assets that you lent on have been severely affected by your competitors.
Not if you didn’t use inflated appraisals and used your own appraiser as a bank. Banks make money two ways on a loan. They make it on the carry spread (difference between the cost of the money they are lending out and the amount they charge) for the loans they keep and they make it on finance fees and securitization charges on the ones they sell.
A lender has every right to refuse to lend $400,000 on a $500,000 property because they feel the underlying value is really $350,000. They don’t have to follow the ‘crowd’. Let some other lender take the risk. Unfortunately they got greedy and picked up those loans; promptly securitizing them, labeling them AAA and selling them to get rid of the risk. The lenders (many, not all) forgot that by law, if they misstate the risk or fundimentals on the CDO/MBSs, the originating lender can be forced to repurchase the securitized loan package. The lenders that did not forget about the law formed wholly owned subsidiaries to funnel the money through, using the corporate shield to protect themselves from liability.
December 2, 2007 at 4:08 PM #107644ParticipantYou are all missing the point; even if you kept your nose clean and only made loans to people with 800 credit scores with 20% down, the underlying value of the assets that you lent on have been severely affected by your competitors.
Not if you didn’t use inflated appraisals and used your own appraiser as a bank. Banks make money two ways on a loan. They make it on the carry spread (difference between the cost of the money they are lending out and the amount they charge) for the loans they keep and they make it on finance fees and securitization charges on the ones they sell.
A lender has every right to refuse to lend $400,000 on a $500,000 property because they feel the underlying value is really $350,000. They don’t have to follow the ‘crowd’. Let some other lender take the risk. Unfortunately they got greedy and picked up those loans; promptly securitizing them, labeling them AAA and selling them to get rid of the risk. The lenders (many, not all) forgot that by law, if they misstate the risk or fundimentals on the CDO/MBSs, the originating lender can be forced to repurchase the securitized loan package. The lenders that did not forget about the law formed wholly owned subsidiaries to funnel the money through, using the corporate shield to protect themselves from liability.
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