Forum Replies Created
-
AuthorPosts
-
davelj
Participant[quote=paramount]
Oh get off your high horse[img_assist|nid=14709|title=High Horse|desc=|link=node|align=left|width=100|height=75]
[/quote]
No. I rather like my high horse. I’m quite happy atop it at the moment.
[quote=paramount]
And BTW those lenders are way more than likely the American tax payers not some con artist mortgage broker.[/quote]OK, let’s assume that the lenders are the American tax payers. Are you suggesting that We the People should have less strict underwriting standards than the typical private enterprise? That’s absurd. That’s how We the People ended up with the GSEs. So, contrary to your position, I think that if We the People’s money is at stake, the underwriting standards should be among the highest in the industry. I remain unsympathetic.
Now, I’m off for a ride on my high horse… at a pleasant gallop.
Participant[quote=paramount]
Oh get off your high horse[img_assist|nid=14709|title=High Horse|desc=|link=node|align=left|width=100|height=75]
[/quote]
No. I rather like my high horse. I’m quite happy atop it at the moment.
[quote=paramount]
And BTW those lenders are way more than likely the American tax payers not some con artist mortgage broker.[/quote]OK, let’s assume that the lenders are the American tax payers. Are you suggesting that We the People should have less strict underwriting standards than the typical private enterprise? That’s absurd. That’s how We the People ended up with the GSEs. So, contrary to your position, I think that if We the People’s money is at stake, the underwriting standards should be among the highest in the industry. I remain unsympathetic.
Now, I’m off for a ride on my high horse… at a pleasant gallop.
Participant[quote=paramount]
Oh get off your high horse[img_assist|nid=14709|title=High Horse|desc=|link=node|align=left|width=100|height=75]
[/quote]
No. I rather like my high horse. I’m quite happy atop it at the moment.
[quote=paramount]
And BTW those lenders are way more than likely the American tax payers not some con artist mortgage broker.[/quote]OK, let’s assume that the lenders are the American tax payers. Are you suggesting that We the People should have less strict underwriting standards than the typical private enterprise? That’s absurd. That’s how We the People ended up with the GSEs. So, contrary to your position, I think that if We the People’s money is at stake, the underwriting standards should be among the highest in the industry. I remain unsympathetic.
Now, I’m off for a ride on my high horse… at a pleasant gallop.
Participant[quote=Diego Mamani][quote]These are not “problems” – they are good things. It’s called “proper underwriting”[/quote][quote]had the same experience (…) Both our credits were above 800 + I’ve held the same job for close to 10 yrs.[/quote]
I think that “proper underwriting” would require that lenders be smart about it, and require somewhat less documentation from borrowers with ~800 scores, stable incomes, low LTV, etc.
These “smart” bankers went from lending money freely in NINJA fashion, to now being completely tight and giving everybody, regardless of creditworthiness, a hard time.
Both extremes are wrong.[/quote]
I think what lenders have learned in the recent cycle is that FICO scores and credit reports often lie. That is, all too often they are not good predictors of behavior where repayment of mortgage loans are concerned. How many people, after all, used their “high FICO” scores to buy more house than they could afford and then subsequently “walked away”? Apparently quite a few. So, if you want to blame someone for your underwriting woes, start with Fair Isaac (who designed a flawed product) and then move onto the folks with high FICOs who rendered the scores of dubious value. I’m still not sympathetic. I just don’t think you have a sense of history as to how mortgages were underwritten 15+ years ago. It was quite an ordeal – as it should be.
Participant[quote=Diego Mamani][quote]These are not “problems” – they are good things. It’s called “proper underwriting”[/quote][quote]had the same experience (…) Both our credits were above 800 + I’ve held the same job for close to 10 yrs.[/quote]
I think that “proper underwriting” would require that lenders be smart about it, and require somewhat less documentation from borrowers with ~800 scores, stable incomes, low LTV, etc.
These “smart” bankers went from lending money freely in NINJA fashion, to now being completely tight and giving everybody, regardless of creditworthiness, a hard time.
Both extremes are wrong.[/quote]
I think what lenders have learned in the recent cycle is that FICO scores and credit reports often lie. That is, all too often they are not good predictors of behavior where repayment of mortgage loans are concerned. How many people, after all, used their “high FICO” scores to buy more house than they could afford and then subsequently “walked away”? Apparently quite a few. So, if you want to blame someone for your underwriting woes, start with Fair Isaac (who designed a flawed product) and then move onto the folks with high FICOs who rendered the scores of dubious value. I’m still not sympathetic. I just don’t think you have a sense of history as to how mortgages were underwritten 15+ years ago. It was quite an ordeal – as it should be.
Participant[quote=Diego Mamani][quote]These are not “problems” – they are good things. It’s called “proper underwriting”[/quote][quote]had the same experience (…) Both our credits were above 800 + I’ve held the same job for close to 10 yrs.[/quote]
I think that “proper underwriting” would require that lenders be smart about it, and require somewhat less documentation from borrowers with ~800 scores, stable incomes, low LTV, etc.
These “smart” bankers went from lending money freely in NINJA fashion, to now being completely tight and giving everybody, regardless of creditworthiness, a hard time.
Both extremes are wrong.[/quote]
I think what lenders have learned in the recent cycle is that FICO scores and credit reports often lie. That is, all too often they are not good predictors of behavior where repayment of mortgage loans are concerned. How many people, after all, used their “high FICO” scores to buy more house than they could afford and then subsequently “walked away”? Apparently quite a few. So, if you want to blame someone for your underwriting woes, start with Fair Isaac (who designed a flawed product) and then move onto the folks with high FICOs who rendered the scores of dubious value. I’m still not sympathetic. I just don’t think you have a sense of history as to how mortgages were underwritten 15+ years ago. It was quite an ordeal – as it should be.
Participant[quote=Diego Mamani][quote]These are not “problems” – they are good things. It’s called “proper underwriting”[/quote][quote]had the same experience (…) Both our credits were above 800 + I’ve held the same job for close to 10 yrs.[/quote]
I think that “proper underwriting” would require that lenders be smart about it, and require somewhat less documentation from borrowers with ~800 scores, stable incomes, low LTV, etc.
These “smart” bankers went from lending money freely in NINJA fashion, to now being completely tight and giving everybody, regardless of creditworthiness, a hard time.
Both extremes are wrong.[/quote]
I think what lenders have learned in the recent cycle is that FICO scores and credit reports often lie. That is, all too often they are not good predictors of behavior where repayment of mortgage loans are concerned. How many people, after all, used their “high FICO” scores to buy more house than they could afford and then subsequently “walked away”? Apparently quite a few. So, if you want to blame someone for your underwriting woes, start with Fair Isaac (who designed a flawed product) and then move onto the folks with high FICOs who rendered the scores of dubious value. I’m still not sympathetic. I just don’t think you have a sense of history as to how mortgages were underwritten 15+ years ago. It was quite an ordeal – as it should be.
Participant[quote=Diego Mamani][quote]These are not “problems” – they are good things. It’s called “proper underwriting”[/quote][quote]had the same experience (…) Both our credits were above 800 + I’ve held the same job for close to 10 yrs.[/quote]
I think that “proper underwriting” would require that lenders be smart about it, and require somewhat less documentation from borrowers with ~800 scores, stable incomes, low LTV, etc.
These “smart” bankers went from lending money freely in NINJA fashion, to now being completely tight and giving everybody, regardless of creditworthiness, a hard time.
Both extremes are wrong.[/quote]
I think what lenders have learned in the recent cycle is that FICO scores and credit reports often lie. That is, all too often they are not good predictors of behavior where repayment of mortgage loans are concerned. How many people, after all, used their “high FICO” scores to buy more house than they could afford and then subsequently “walked away”? Apparently quite a few. So, if you want to blame someone for your underwriting woes, start with Fair Isaac (who designed a flawed product) and then move onto the folks with high FICOs who rendered the scores of dubious value. I’m still not sympathetic. I just don’t think you have a sense of history as to how mortgages were underwritten 15+ years ago. It was quite an ordeal – as it should be.
Participant[quote=jimmyle]
Is this normal now? Any one else having problems with your mortgage loan approval?[/quote]Yup, it’s Back to the 90s! These are not “problems” – they are good things. It’s called “proper underwriting” – a long-forgotten art that was absent for over a decade. You should feel lucky because I personally wouldn’t make a loan to anyone who put only 10% down – regardless of their credit history, etc. So, in my view, you should be kissing your lender’s ass instead of complaining. But that’s just me.
Participant[quote=jimmyle]
Is this normal now? Any one else having problems with your mortgage loan approval?[/quote]Yup, it’s Back to the 90s! These are not “problems” – they are good things. It’s called “proper underwriting” – a long-forgotten art that was absent for over a decade. You should feel lucky because I personally wouldn’t make a loan to anyone who put only 10% down – regardless of their credit history, etc. So, in my view, you should be kissing your lender’s ass instead of complaining. But that’s just me.
Participant[quote=jimmyle]
Is this normal now? Any one else having problems with your mortgage loan approval?[/quote]Yup, it’s Back to the 90s! These are not “problems” – they are good things. It’s called “proper underwriting” – a long-forgotten art that was absent for over a decade. You should feel lucky because I personally wouldn’t make a loan to anyone who put only 10% down – regardless of their credit history, etc. So, in my view, you should be kissing your lender’s ass instead of complaining. But that’s just me.
Participant[quote=jimmyle]
Is this normal now? Any one else having problems with your mortgage loan approval?[/quote]Yup, it’s Back to the 90s! These are not “problems” – they are good things. It’s called “proper underwriting” – a long-forgotten art that was absent for over a decade. You should feel lucky because I personally wouldn’t make a loan to anyone who put only 10% down – regardless of their credit history, etc. So, in my view, you should be kissing your lender’s ass instead of complaining. But that’s just me.
Participant[quote=jimmyle]
Is this normal now? Any one else having problems with your mortgage loan approval?[/quote]Yup, it’s Back to the 90s! These are not “problems” – they are good things. It’s called “proper underwriting” – a long-forgotten art that was absent for over a decade. You should feel lucky because I personally wouldn’t make a loan to anyone who put only 10% down – regardless of their credit history, etc. So, in my view, you should be kissing your lender’s ass instead of complaining. But that’s just me.
Participant[quote=davelj][quote=briansd1][quote=Diego Mamani]Yeah dude, cut back!
Anyways, the $13B pales in comparison to the money that we (taxpayers) will lose with Fannie and Freddie. We’ve already lost close to $150 BILLION, and we stand to lose another $160 billion to $1 trillion, according to conservative estimates:
True enough.
FHA will also likely cost taxpayers $100 billion.
Funny thing is that Fan/Fred and FHA sprang into action after the financial crisis to save the market.
But certain uninformed people who just don’t understand the chain of events accuse the GSEs of CAUSING the crisis.[/quote]
How many times I have to explain this I just don’t know (this is may be the fifth time). As I wrote back in December 2009:
[quote=davelj]
I think the Fannie/Freddie (F&F) TARP [in addition to accumulated losses] will also get paid back, but over a much longer time horizon. Spread lenders, almost no matter how bad off they are, can always fill a hole, the only issue being how long it takes. And it’s going to take F&F a long time. To use an example, lets say that F&F charge off 10% of their portfolio (which would be a big number). Further, let’s say the average yield on the remaining 90% of their book is 5.5% and their funding costs (now borrowing at govt rates) are 2.5%. Add in 100 bps of operating expenses and you have a 200 bp spread. Here, it takes F&F 5.5 years to fill its hole (from losses) with spread income from the performing portfolio. If you assume that F&F’s losses are going to be 20% of its book, it takes them 11 years to fill the hole, and so on. So, while we’re hearing about the big “losses” coming out of F&F – which are real losses – we will get that money back… eventually… but it could be many years. We will lose in real (that is, inflation-adjusted) terms for sure.[/quote]The point here is that F&F’s “losses” are an income statement item and are meaningless absent a discussion of the balance sheet. We, the US Taxpayers, now own a huge pile of mortgage assets (along with corresponding debt that funds them). The losses will stop eventually – likely in a few years – and the spread income will fill the hole (think of it as accumulated negative retained earnings in accounting terms) and eventually yield a net profit. But… this is in nominal dollars and down the road many years. So, again, there will be a loss in real dollars, but that loss will be a small fraction of the “current losses” that are reported in the MSM. To be clear, I don’t give a rat’s ass about F&F – I just want folks to understand the difference between (1) temporary losses and permanent losses of capital, and (2) income statements and balance sheets.[/quote]
We’re starting to see signs of what I’ve been talking about for quite some time at the GSEs (although earlier than I would’ve expected):
Pay attention to the following headings: “Fascinating GSE Market Developments” and “No Lost Money on the GSEs?”. McFarland is making the same point I’ve been making for quite some time, albeit without providing the math behind it and on shorter time horizon.
-
AuthorPosts
