[HLS]

It’s $5.50 today, that I do know. Bob is 77. I don’t know when the last time he raised his price, but it’s been awhile.

He claims that his rent hasn’t been raised in 30 years either.

[HLS]

I’ve never used 8821. It’s 4506 and 4506-T that get requested. They should be filled out at signing, especially lines 6, 7 and 9, and limited to the 1040 returns.

When these are dated, the 3rd party only has 60 days to request the tax returns. That is clearly in the instructions. I don’t want my clients signing a blank form.

On a stated income or no doc loan, they cannot check income.
If self employed, they want to confirm that a schedule C was filed.

[HLS]

I’ve never used 8821. It’s 4506 and 4506-T that get requested. They should be filled out at signing, especially lines 6, 7 and 9, and limited to the 1040 returns.

When these are dated, the 3rd party only has 60 days to request the tax returns. That is clearly in the instructions. I don’t want my clients signing a blank form.

On a stated income or no doc loan, they cannot check income.
If self employed, they want to confirm that a schedule C was filed.

[HLS]

I’ve never used 8821. It’s 4506 and 4506-T that get requested. They should be filled out at signing, especially lines 6, 7 and 9, and limited to the 1040 returns.

When these are dated, the 3rd party only has 60 days to request the tax returns. That is clearly in the instructions. I don’t want my clients signing a blank form.

On a stated income or no doc loan, they cannot check income.
If self employed, they want to confirm that a schedule C was filed.

[HLS]

Who said anything about a toxic loan ?

(There are actually plenty of high score borrowers that did get fooled into toxic loans)

100% financing was brilliant!
Mortgage interest is some of the cheapest money that you can get. There are people with high credit scores who financed 100% just because they could.

Their cash is worth more to them than the rate on a 20% 2nd.

Many people put money down only because they think they should. Others understand the OPM game and put thier cash to better use.

Many people who have paid principal into their homes are losing it all anyway. With an interest only loan, they would be walking away from less out of pocket cash.

The more cash they put down, the more they will be walking away from.

[HLS]

Who said anything about a toxic loan ?

(There are actually plenty of high score borrowers that did get fooled into toxic loans)

100% financing was brilliant!
Mortgage interest is some of the cheapest money that you can get. There are people with high credit scores who financed 100% just because they could.

Their cash is worth more to them than the rate on a 20% 2nd.

Many people put money down only because they think they should. Others understand the OPM game and put thier cash to better use.

Many people who have paid principal into their homes are losing it all anyway. With an interest only loan, they would be walking away from less out of pocket cash.

The more cash they put down, the more they will be walking away from.

[HLS]

Who said anything about a toxic loan ?

(There are actually plenty of high score borrowers that did get fooled into toxic loans)

100% financing was brilliant!
Mortgage interest is some of the cheapest money that you can get. There are people with high credit scores who financed 100% just because they could.

Their cash is worth more to them than the rate on a 20% 2nd.

Many people put money down only because they think they should. Others understand the OPM game and put thier cash to better use.

Many people who have paid principal into their homes are losing it all anyway. With an interest only loan, they would be walking away from less out of pocket cash.

The more cash they put down, the more they will be walking away from.

[HLS]

Everybody has a different need/reason for wanting to buy.
If it’s only because you are worried about the market bouncing, I don’t think that you have anything to worry about.

The ball has no air in it and is completely flat. The air compressor is broken and it should be years before that ball can bounce again.

Temec-Murrieta is headed for a major correction.
Things are going VERY well for you. Prices are cheaper than they were 2 years ago, but they aren’t as cheap as they are going to get.

Get your credit score as high as you can and keep saving for a larger down payment.

BTW, I remember Temecula/Rancho California in the 1960’s. A haircut in Old Town at Bob’s was $5.50 years ago, and it’s $5.50 today.
(It’s only $5 for seniors) He’s been in the same spot for over 40 years, right behind the Swing Inn on Front Street.

[HLS]

Everybody has a different need/reason for wanting to buy.
If it’s only because you are worried about the market bouncing, I don’t think that you have anything to worry about.

The ball has no air in it and is completely flat. The air compressor is broken and it should be years before that ball can bounce again.

Temec-Murrieta is headed for a major correction.
Things are going VERY well for you. Prices are cheaper than they were 2 years ago, but they aren’t as cheap as they are going to get.

Get your credit score as high as you can and keep saving for a larger down payment.

BTW, I remember Temecula/Rancho California in the 1960’s. A haircut in Old Town at Bob’s was $5.50 years ago, and it’s $5.50 today.
(It’s only $5 for seniors) He’s been in the same spot for over 40 years, right behind the Swing Inn on Front Street.

[HLS]

Everybody has a different need/reason for wanting to buy.
If it’s only because you are worried about the market bouncing, I don’t think that you have anything to worry about.

The ball has no air in it and is completely flat. The air compressor is broken and it should be years before that ball can bounce again.

Temec-Murrieta is headed for a major correction.
Things are going VERY well for you. Prices are cheaper than they were 2 years ago, but they aren’t as cheap as they are going to get.

Get your credit score as high as you can and keep saving for a larger down payment.

BTW, I remember Temecula/Rancho California in the 1960’s. A haircut in Old Town at Bob’s was $5.50 years ago, and it’s $5.50 today.
(It’s only $5 for seniors) He’s been in the same spot for over 40 years, right behind the Swing Inn on Front Street.

[HLS]

There is a HUGE difference between an original “purchase money” loan and a REFI loan, regardless of cash taken out or not.

In most cases, a purchase money loan is NON-recourse debt.
The loan is secured by the property only. You can walk, and it will be on your credit report for 7 years.
There is some talk of getting an IRS 1099 for debt relief, but it may not be true.

With a REFI loan, it is recourse debt, which means the lenders servicing unit can come after you for any loss and deliver the 1099 for any amount that is written off.

What could happen and what actually does happen is two different things.

The real question is what is the threshold of pain for a borrower with a 750-800 score who owes $600K on a home worth $400K.. at what point will a prime borrower walk ??

http://en.wikipedia.org/wiki/Nonrecourse_debt

[HLS]

There is a HUGE difference between an original “purchase money” loan and a REFI loan, regardless of cash taken out or not.

In most cases, a purchase money loan is NON-recourse debt.
The loan is secured by the property only. You can walk, and it will be on your credit report for 7 years.
There is some talk of getting an IRS 1099 for debt relief, but it may not be true.

With a REFI loan, it is recourse debt, which means the lenders servicing unit can come after you for any loss and deliver the 1099 for any amount that is written off.

What could happen and what actually does happen is two different things.

The real question is what is the threshold of pain for a borrower with a 750-800 score who owes $600K on a home worth $400K.. at what point will a prime borrower walk ??

http://en.wikipedia.org/wiki/Nonrecourse_debt

[HLS]

There is a HUGE difference between an original “purchase money” loan and a REFI loan, regardless of cash taken out or not.

In most cases, a purchase money loan is NON-recourse debt.
The loan is secured by the property only. You can walk, and it will be on your credit report for 7 years.
There is some talk of getting an IRS 1099 for debt relief, but it may not be true.

With a REFI loan, it is recourse debt, which means the lenders servicing unit can come after you for any loss and deliver the 1099 for any amount that is written off.

What could happen and what actually does happen is two different things.

The real question is what is the threshold of pain for a borrower with a 750-800 score who owes $600K on a home worth $400K.. at what point will a prime borrower walk ??

http://en.wikipedia.org/wiki/Nonrecourse_debt

[HLS]

Just Ask…Buying down the rate is “discount points” that get paid to the lender. You are giving them pure profit up front, in exchange for a lower rate and payment for the life of the loan..You CANNOT be overcharged in rate AND buy down the rate, it just isn’t possible.

Many mortgage folks will not discuss buying down the rate with you, because they will not get a penny of commission from the lender.
The buy down is different on every loan, and isn’t a set amount.
It might cost 5/8ths to buy the rate down 1/8th, which means that it will take well over 5 years to make pay off, but for someone who ends up keeping the loan for 10 years or longer, it will save them a small fortune. The buy down fee is the same dollar amount whether you keep the loan 2 years or 30 years.

It is possible to get a 30 year fixed in the mid 5’s today, it just isn’t cheap.

I would have liked to have been a fly on the wall with the discussions that you had.
The loans aren’t a rip off… It’s many of the people “selling” them that are the rip offs.
It’s not necessarilty foolish. It depends what your needs are and what you qualify for.

There aren’t really “subprime loans”…. there are subprime BORROWERS and lenders who lend to subprime borrowers.
Prime borrowers can get similar loans. ARMS, 2 YR, 3 YR, Option Arms, etc, The big difference is that virtually all subprime borrowers get a prepayment penalty.

Sometimes a prime borrower can get a better deal by taking a loan from a subprime lender, with a prepay.

Finding someone to trust isn’t easy, but it is possible.

The back end commission will probably ONLY show up on one line of the final “estimated closing statement” as YSP POC
and be off to the left of the 2 columns of numbers.

THIS IS ONLY TRUE WITH LOANS THROUGH BROKERS.
Mortgage brokers were cutting into banking business profits, so the banking industry lobbied so that brokers have to disclose back end commissions BUT THE BANKS DON’T.

It gives the illusion that banks or direct lenders charge less, which isn’t necessarily true. When banks compete, you DON’T always win. They could be cheaper, but they might not.

The ONLY way that gets paid is because the borrower was charged a higher rate than they qualified for and the lender is rewarding the mortgage pro for screwing his client (often a friend or family member who was promised a no cost loan) Isn’t that special ??

[HLS]

Just Ask…Buying down the rate is “discount points” that get paid to the lender. You are giving them pure profit up front, in exchange for a lower rate and payment for the life of the loan..You CANNOT be overcharged in rate AND buy down the rate, it just isn’t possible.

Many mortgage folks will not discuss buying down the rate with you, because they will not get a penny of commission from the lender.
The buy down is different on every loan, and isn’t a set amount.
It might cost 5/8ths to buy the rate down 1/8th, which means that it will take well over 5 years to make pay off, but for someone who ends up keeping the loan for 10 years or longer, it will save them a small fortune. The buy down fee is the same dollar amount whether you keep the loan 2 years or 30 years.

It is possible to get a 30 year fixed in the mid 5’s today, it just isn’t cheap.

I would have liked to have been a fly on the wall with the discussions that you had.
The loans aren’t a rip off… It’s many of the people “selling” them that are the rip offs.
It’s not necessarilty foolish. It depends what your needs are and what you qualify for.

There aren’t really “subprime loans”…. there are subprime BORROWERS and lenders who lend to subprime borrowers.
Prime borrowers can get similar loans. ARMS, 2 YR, 3 YR, Option Arms, etc, The big difference is that virtually all subprime borrowers get a prepayment penalty.

Sometimes a prime borrower can get a better deal by taking a loan from a subprime lender, with a prepay.

Finding someone to trust isn’t easy, but it is possible.

The back end commission will probably ONLY show up on one line of the final “estimated closing statement” as YSP POC
and be off to the left of the 2 columns of numbers.

THIS IS ONLY TRUE WITH LOANS THROUGH BROKERS.
Mortgage brokers were cutting into banking business profits, so the banking industry lobbied so that brokers have to disclose back end commissions BUT THE BANKS DON’T.

It gives the illusion that banks or direct lenders charge less, which isn’t necessarily true. When banks compete, you DON’T always win. They could be cheaper, but they might not.

The ONLY way that gets paid is because the borrower was charged a higher rate than they qualified for and the lender is rewarding the mortgage pro for screwing his client (often a friend or family member who was promised a no cost loan) Isn’t that special ??

[Author]

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