[HLS]

Of course you “speaketh the truth”

Fraud is possible, even in a full doc loan.
The lenders know this.
If you were told that you had a million dollars to loan out,and your income depended on loaning it out, would you only loan to perfect borrowers a penny at a time ?
(And by the way, when the first million is gone, we will give you more) Didn’t think so.

YES, the crazy financing fueled the speculation. It was a mania. I KNEW the housing market would crash, I just didn’t know when. It wasn’t a difficult decision for me to sell all my rentals. I’m no genius.

What we all have to realize is that the govt (in theory) has the best and brightest working for and advising them, ala Greenspan, et al. If you and I knew the housing would collapse, don’t you think they did too ?
Regardless of the “official” statements, they KNEW there was a problem, but ignored it.

In ECON 101 you learn that extending credit is a risk. extending 100% financing is suicide, unless you compensate for that risk. Easy margin financing also contributed to 1929 stock margin crash. (Like 5% or 10% down) History PROVES that it’s only a matter of WHEN the collapse happens, not IF it will happen.

When you buy something using a credit card, you are financing 100%. When you pay in full, you don’t owe a penny in interest, very convenient. However, the compenstaing factor for the risk is charging 15%-30% interest instead of 8% on a home. You have nothing invested except your credit score on either.

With a mortgage, charging 8% instead of 6% was never worth the risk, but because of mania & marketing average people got swept up, and bid the price of the underlying product up.
In economic theory, loaning 100% today is no more risky than it was 5 years ago, except that consumer sentiment has changed and prices are dropping, not rising.

There are 5 fingers to point blame with. Govt, Wall Street, Lender, Broker, and Consumer. Whose fault is it really ?

I never bought a home 100%, that option didn’t exist. I did get some easy no qualifying assumables, and owner carrybacks though. I survived the 90’s and had my wide eyes open a few years ago, shaking my head all the way up and now nodding my head on the way down.
In my younger days, I could have been easily tempted by 100% financing. I understand the lure.

Robert Allen had a famous book, Nothing Down For the 90’s. I never made any offers like that, but I knew what they were. Never went to his seminars either, I think that he still is doing them, pumping people up and collecting fees.
What are Carlton Sheets and John Beck doing these days ?
Wade Cook went BK.

[HLS]

Of course you are correct. They weren’t intended to be outright LIAR loans though that is what they became, and I’d say exclusively for some mortgage originators.
They wouldn’t be able to do a full doc loan if their life depended on it…

There is a legit purpose for these loans. I agree with you about them being crud.. The 100% stated still exists with a high enough score, but nothing like it was.

Plenty of owner occupied loans were done stated. LOTS of people have $200K in equity today because they went stated in 2002-03.. Non owner high LTV are never as easy.

What’s unfair to me is although everything to a lender is risk & reward, they still look at credit score first. Some people have a really crappy credit score but piles of equity.
Even with a 500 score, If you own your home outright and want to borrow 30% of the value to get cash out, pay off debt and raise your score, about the only option you have is hard money lender, with rates starting at over 10% and a prepay penalty.
But with a 750 score, you can get 100% financing.
In reality, which loan is riskier, regardless of score ?

Personally, I thought the local market was getting a bit frothy in 2002-2003, and it doubled from there.

It CAN’T be my decision who should APPLY for a loan. The lender’s don’t make it our business to follow people around snooping. They are in the business of lending money, and should have risk factors built in.

If a Wal-Mart worker wants to claim $10,000 a month income,
even with an 800 score, I don’t know if lender will approve it or not.

I think that your original question had some scepticism/sarcasm behind it, and I don’t think that my reply was what you expected, if you expected a reply at all.

I don’t blame you. The industry was mostly people with get rich quick mentalities, with no business background, just out to make money. Most people still get screwed on at least one part of their loan. Losers got rich. They don’t know what the word integrity means. Some of these people are gone. They weren’t ever in it for the customer. The industry deserves the reputation that it has.

Even if you were violated on a $300K mortgage and the house went up to $700K, nobody seem to care.

Some day traders of the 90’s became loan originators, and are gone. Not sure what they are doing now, perhaps selling used cars. There are definitely people that are losing their homes today because they are in a crappy loan due to unethical advice from a slimeball.

As in anything, people fall for misleading ads, pitches, scams and tricks. They don’t take the time to learn or understand their options. They trust friends, family or relatives that don’t have to earn their business, and it’s all about what is probably the largest financial decision of their lives.

For $500 to review other loan docs and make sure people understand what they are getting into, some people laugh, yet many have made mistakes that have cost them tens of thousands of dollars.

Many well educated people have been fooled by a mortgage.
I just tell people the truth.

[HLS]

Of course you are correct. They weren’t intended to be outright LIAR loans though that is what they became, and I’d say exclusively for some mortgage originators.
They wouldn’t be able to do a full doc loan if their life depended on it…

There is a legit purpose for these loans. I agree with you about them being crud.. The 100% stated still exists with a high enough score, but nothing like it was.

Plenty of owner occupied loans were done stated. LOTS of people have $200K in equity today because they went stated in 2002-03.. Non owner high LTV are never as easy.

What’s unfair to me is although everything to a lender is risk & reward, they still look at credit score first. Some people have a really crappy credit score but piles of equity.
Even with a 500 score, If you own your home outright and want to borrow 30% of the value to get cash out, pay off debt and raise your score, about the only option you have is hard money lender, with rates starting at over 10% and a prepay penalty.
But with a 750 score, you can get 100% financing.
In reality, which loan is riskier, regardless of score ?

Personally, I thought the local market was getting a bit frothy in 2002-2003, and it doubled from there.

It CAN’T be my decision who should APPLY for a loan. The lender’s don’t make it our business to follow people around snooping. They are in the business of lending money, and should have risk factors built in.

If a Wal-Mart worker wants to claim $10,000 a month income,
even with an 800 score, I don’t know if lender will approve it or not.

I think that your original question had some scepticism/sarcasm behind it, and I don’t think that my reply was what you expected, if you expected a reply at all.

I don’t blame you. The industry was mostly people with get rich quick mentalities, with no business background, just out to make money. Most people still get screwed on at least one part of their loan. Losers got rich. They don’t know what the word integrity means. Some of these people are gone. They weren’t ever in it for the customer. The industry deserves the reputation that it has.

Even if you were violated on a $300K mortgage and the house went up to $700K, nobody seem to care.

Some day traders of the 90’s became loan originators, and are gone. Not sure what they are doing now, perhaps selling used cars. There are definitely people that are losing their homes today because they are in a crappy loan due to unethical advice from a slimeball.

As in anything, people fall for misleading ads, pitches, scams and tricks. They don’t take the time to learn or understand their options. They trust friends, family or relatives that don’t have to earn their business, and it’s all about what is probably the largest financial decision of their lives.

For $500 to review other loan docs and make sure people understand what they are getting into, some people laugh, yet many have made mistakes that have cost them tens of thousands of dollars.

Many well educated people have been fooled by a mortgage.
I just tell people the truth.

[HLS]

“Change in psychology” is the primary force in any market of any product.

The same people were probably stock experts in the late 90’s.

What else has changed ? Not much. The homes still look the same, they havent moved them. Loans are (mostly) still available. People are still breathing.

Prices dropping didn’t cause the change. The change in thinking is what is causing prices to drop, and then falling prices scare people further.

This is true in any market, esp a bubble. The party is over, the bubble has burst.
Why didn’t people buy a house 5 years ago that could have ?
The psychology was different.

Nobody KNEW in 1996 that prices would triple in 9 years, many people just got lucky.(Some think that they were just smart) Those who bought in 2005 might be unlucky.

Manias didn’t start with tulip bulbs in 17th century Holland.
It’s happened more recently with stocks, gold, silver, coins, stamps, beanie babies, baseball cards, etc.

Something that was “worth” $500 at one time, might be pennies today. Fear and greed rules markets.

When markets are HOT for anything, people cannot imagine there being no buyers, thinking that prices can only drop a few %. Nothing is further from the truth.

When the psychology shifts, watch out below.

Where are all the RE investors that attended seminars ? They wanted to buy homes 2 years ago. They are cheaper today, why aren’t they buying ?? Psychology changed.

The most sobering thing in the world is trying to daytrade stocks.
Some people can never accept that the higher price just seconds ago means nothing anymore, and it may never ever be that price again. Everybody should try this at least once…
Some people are still clinging to stocks that tanked 7-8 years ago, still waiting to get even.

It’s the same thinking that many people have today that their house WAS “worth” $1 million in 2005, so that IS what it’s worth, and it will be back there soon, even though it’s only $800,000 today…….

[HLS]

“Change in psychology” is the primary force in any market of any product.

The same people were probably stock experts in the late 90’s.

What else has changed ? Not much. The homes still look the same, they havent moved them. Loans are (mostly) still available. People are still breathing.

Prices dropping didn’t cause the change. The change in thinking is what is causing prices to drop, and then falling prices scare people further.

This is true in any market, esp a bubble. The party is over, the bubble has burst.
Why didn’t people buy a house 5 years ago that could have ?
The psychology was different.

Nobody KNEW in 1996 that prices would triple in 9 years, many people just got lucky.(Some think that they were just smart) Those who bought in 2005 might be unlucky.

Manias didn’t start with tulip bulbs in 17th century Holland.
It’s happened more recently with stocks, gold, silver, coins, stamps, beanie babies, baseball cards, etc.

Something that was “worth” $500 at one time, might be pennies today. Fear and greed rules markets.

When markets are HOT for anything, people cannot imagine there being no buyers, thinking that prices can only drop a few %. Nothing is further from the truth.

When the psychology shifts, watch out below.

Where are all the RE investors that attended seminars ? They wanted to buy homes 2 years ago. They are cheaper today, why aren’t they buying ?? Psychology changed.

The most sobering thing in the world is trying to daytrade stocks.
Some people can never accept that the higher price just seconds ago means nothing anymore, and it may never ever be that price again. Everybody should try this at least once…
Some people are still clinging to stocks that tanked 7-8 years ago, still waiting to get even.

It’s the same thinking that many people have today that their house WAS “worth” $1 million in 2005, so that IS what it’s worth, and it will be back there soon, even though it’s only $800,000 today…….

[HLS]

Hi Breeze, you may only know of one, but there are dozens of legitimate reasons.

If someone comes to me and tells me that they are a wage earner and want to go stated, it raises a red flag.
By asking a few questions, I decide if I want to work with them or not.

I never know if they are telling me the truth or not, but it is not my reponsibility to play detective to catch people lying. I have a conscience and morals. That’s not my function, any more than an employee at Best Buy should quiz the buyer of a $5,000 TV on extended credit about their income, or a car dealer telling someone that they cannot afford a car, if they get approved for financing. It’s up to the lender in every case. They are instructed what levels of risk to take.

I just need to put the application together for submission to the underwriter for lender decision. I am not the one that came up with the idea of Stated Wage Earner loans, the lender did. They are willing to take risks based on their criteria. That is what they do.

The obvious (which is what we all assume) is that if you get a paycheck and W-2, and don’t want to show it to the lender, you are lying about your income. It isn’t that simple.

I ALWAYS explain this to a wage earner who wants to go stated, so their better be other factors. I will not do a loan for someone with $3,000 income and $2,000 payments, and state $6,000, because I know that they can’t afford it, and I will tell them that. They can go elsewhere if they want to, and some probably have. I can’t stop them.

Most people just don’t understand underwriting guidelines.
A wage earner who is salary plus commission gets their tax deductions viewed differently. Their paycheck shows this.
Some get tips as a large portion of their income but cannot prove them.
Some rent out rooms in their house but cannot document the income.
Someone who takes a home office deduction and car expenses on their tax return has AGI that may not qualify.
MANY have other sources of income that cannot be documented for different reasons.
Some have WEALTHY families that support them.
Some have a spouse with a huge income but low credit score, so the loan is done with higher score person only.
Some people have switched jobs and have huge swings in income that lender won’t accept full doc.
Some have rental property and need to refi primary to payoff other mortgage.
Some need cash out to payoff other debt and lower overall payment.
Some people have cosigned for another loan that someone else pays for 100%, but the debt counts against them.
Sometimes it’s just EASIER and the rate could be exactly the same as full doc.
Legit overtime income may not be accepted by the UW.
Many lenders will not factor in a debt payment that is 10 months or less, but you may have 12 months left.
There are many other good reasons.

I didn’t get people into their mess, I try to get them OUT.
Many people don’t know that you only get credit for 75% of gross rental income, and with several properties, the difference in actual income and what lender credits you can make the difference in full doc qualifying (or not) to a wage earner.

MANY MANY people who went stated income were able to get loans and can easily afford their payments. It allowed many people to buy a house, who now have equity. Personally, I wouldn’t have lent them my money.
The actual % of defaults is tiny compared to what was funded, but it’s the defaults that are getting 100% of the publicity.

Of course there are idiot mortgage people who created/fabricated incomes (and even jobs) so they could get a loan done, and there are devious borrowers who knew the system and how to abuse it, and there were some people who just simply couldn’t afford it.

Even with all the publicity, there are still plenty of rogues in the industry, trying to trick and cheat people one way or another.

Long answer to your simple question. Probably not the answer that you would get from most mortgage people, IF they told you the truth.

Out of curiousity, what’s your ONE reason ?

[email protected]

[HLS]

Hi Breeze, you may only know of one, but there are dozens of legitimate reasons.

If someone comes to me and tells me that they are a wage earner and want to go stated, it raises a red flag.
By asking a few questions, I decide if I want to work with them or not.

I never know if they are telling me the truth or not, but it is not my reponsibility to play detective to catch people lying. I have a conscience and morals. That’s not my function, any more than an employee at Best Buy should quiz the buyer of a $5,000 TV on extended credit about their income, or a car dealer telling someone that they cannot afford a car, if they get approved for financing. It’s up to the lender in every case. They are instructed what levels of risk to take.

I just need to put the application together for submission to the underwriter for lender decision. I am not the one that came up with the idea of Stated Wage Earner loans, the lender did. They are willing to take risks based on their criteria. That is what they do.

The obvious (which is what we all assume) is that if you get a paycheck and W-2, and don’t want to show it to the lender, you are lying about your income. It isn’t that simple.

I ALWAYS explain this to a wage earner who wants to go stated, so their better be other factors. I will not do a loan for someone with $3,000 income and $2,000 payments, and state $6,000, because I know that they can’t afford it, and I will tell them that. They can go elsewhere if they want to, and some probably have. I can’t stop them.

Most people just don’t understand underwriting guidelines.
A wage earner who is salary plus commission gets their tax deductions viewed differently. Their paycheck shows this.
Some get tips as a large portion of their income but cannot prove them.
Some rent out rooms in their house but cannot document the income.
Someone who takes a home office deduction and car expenses on their tax return has AGI that may not qualify.
MANY have other sources of income that cannot be documented for different reasons.
Some have WEALTHY families that support them.
Some have a spouse with a huge income but low credit score, so the loan is done with higher score person only.
Some people have switched jobs and have huge swings in income that lender won’t accept full doc.
Some have rental property and need to refi primary to payoff other mortgage.
Some need cash out to payoff other debt and lower overall payment.
Some people have cosigned for another loan that someone else pays for 100%, but the debt counts against them.
Sometimes it’s just EASIER and the rate could be exactly the same as full doc.
Legit overtime income may not be accepted by the UW.
Many lenders will not factor in a debt payment that is 10 months or less, but you may have 12 months left.
There are many other good reasons.

I didn’t get people into their mess, I try to get them OUT.
Many people don’t know that you only get credit for 75% of gross rental income, and with several properties, the difference in actual income and what lender credits you can make the difference in full doc qualifying (or not) to a wage earner.

MANY MANY people who went stated income were able to get loans and can easily afford their payments. It allowed many people to buy a house, who now have equity. Personally, I wouldn’t have lent them my money.
The actual % of defaults is tiny compared to what was funded, but it’s the defaults that are getting 100% of the publicity.

Of course there are idiot mortgage people who created/fabricated incomes (and even jobs) so they could get a loan done, and there are devious borrowers who knew the system and how to abuse it, and there were some people who just simply couldn’t afford it.

Even with all the publicity, there are still plenty of rogues in the industry, trying to trick and cheat people one way or another.

Long answer to your simple question. Probably not the answer that you would get from most mortgage people, IF they told you the truth.

Out of curiousity, what’s your ONE reason ?

[email protected]

[HLS]

The questions that are asked on most of these websites are usually just a few basics, and you are purposely MISquoted rates to get you to apply.

Once they get the application, eventually you find out that you don’t qualify for what you think, but they got the lead, and some people stay with them. Sometimes you don’t find out the rate until after you have paid for an appraisal. It borders on fraud IMO.

Without the answers to about 20 questions, it’s not possible to give someone an accurate quote, and even with the answers, it can still be difficult.

The conditions to get loans funded many times are frustrating. Up to the underwriter.

By the way, If you know that you want a 30 year loan, why would you even want a no cost loan ? Worst thing that you could probably do.

Of the OP quotes, BB&T’s are obviously the most misleading.
I don’t believe that rate exists today for a “no cost” jumbo loan, or even close, nor do I believe that Wells would offer 6.875 the previous day.

I’m NOT saying that I don’t believe that is what you saw. I’m saying that I don’t believe they would fund the loan.
Even if they locked it, it prob wouldn’t get approved.
Just my 2c.

[HLS]

The questions that are asked on most of these websites are usually just a few basics, and you are purposely MISquoted rates to get you to apply.

Once they get the application, eventually you find out that you don’t qualify for what you think, but they got the lead, and some people stay with them. Sometimes you don’t find out the rate until after you have paid for an appraisal. It borders on fraud IMO.

Without the answers to about 20 questions, it’s not possible to give someone an accurate quote, and even with the answers, it can still be difficult.

The conditions to get loans funded many times are frustrating. Up to the underwriter.

By the way, If you know that you want a 30 year loan, why would you even want a no cost loan ? Worst thing that you could probably do.

Of the OP quotes, BB&T’s are obviously the most misleading.
I don’t believe that rate exists today for a “no cost” jumbo loan, or even close, nor do I believe that Wells would offer 6.875 the previous day.

I’m NOT saying that I don’t believe that is what you saw. I’m saying that I don’t believe they would fund the loan.
Even if they locked it, it prob wouldn’t get approved.
Just my 2c.

[HLS]

Your conspiracy theories don’t stop do they ?
AND
since you KNOW that “mortgage guys aren’t always exposed to what is going on behind the scenes”, as you state above, there’s no sense in trying to tell you anything differently is there ?

As you theorize, mortgage guys are just a bunch of lying puppets for the lender out to fleece experts like you.

[HLS]

Your conspiracy theories don’t stop do they ?
AND
since you KNOW that “mortgage guys aren’t always exposed to what is going on behind the scenes”, as you state above, there’s no sense in trying to tell you anything differently is there ?

As you theorize, mortgage guys are just a bunch of lying puppets for the lender out to fleece experts like you.

[HLS]

Hi Gael, I’m HLS, I’m in the loan biz in Murrieta, can do loans anywhere in CA.

Qualifying is the trick today.
I’m sure that you understand that 100% finanacing is about the biggest risk a lender can take. Even with a good credit score, if you walk, you have litte invested, and THEY get a house.

HOWEVER, much to the surprise of many, even after the past few days of Wall Street meltdown, it MAY still be possible.

Depending on about 10 other factors and what your employment situation is (Wage earner or self employed, how long, reserves etc) I’d be happy to discuss it with you.

I’m not going to blow smoke or tell you that it’s going to be easy, or cheap, but I will quote you PAR (wholesale) rates and what the fee would be if I can do it for you.
You can pick title & escrow company if you want.

Even as of yesterday, Aug 03, below is what one program offers, it’s not exactly stated, but you might qualify with bank statements.
I can try and find 100% STATED for you over the next few days, At a 700 score, Stated 100% jumbo still might be possible. It may have to be a single loan, and you may not like the payment.

Programs are coming and going daily. Also depends what term you are looking for.
5% down will make a huge difference, but a large reserve account might be the compensating factor to a lender.

If that’s what you want and can afford it, I’ll get you the best rate that I can, and try and get you qualified.

100% LTV
$550,000 Loan Amount with 620+ Score
$750,000 Loan Amount with 660+ Score
Full Doc or Bank Statements
Self Employed & Wage Earner
620 Score (VOR Waived with 660+ Score)
No Reserves!
No MI!
50% DTI on Fixed Rate Products!
Seller Contributions Allowed up to 6%
Gift Funds Allowed!
No Payment Shock Requirements!

QUALIFYING is the key. Need to know more about your situation.

Please email me at [email protected] with your contact info, including phone number, and I’ll be happy to give you a call. Thanks.

[HLS]

Hi Gael, I’m HLS, I’m in the loan biz in Murrieta, can do loans anywhere in CA.

Qualifying is the trick today.
I’m sure that you understand that 100% finanacing is about the biggest risk a lender can take. Even with a good credit score, if you walk, you have litte invested, and THEY get a house.

HOWEVER, much to the surprise of many, even after the past few days of Wall Street meltdown, it MAY still be possible.

Depending on about 10 other factors and what your employment situation is (Wage earner or self employed, how long, reserves etc) I’d be happy to discuss it with you.

I’m not going to blow smoke or tell you that it’s going to be easy, or cheap, but I will quote you PAR (wholesale) rates and what the fee would be if I can do it for you.
You can pick title & escrow company if you want.

Even as of yesterday, Aug 03, below is what one program offers, it’s not exactly stated, but you might qualify with bank statements.
I can try and find 100% STATED for you over the next few days, At a 700 score, Stated 100% jumbo still might be possible. It may have to be a single loan, and you may not like the payment.

Programs are coming and going daily. Also depends what term you are looking for.
5% down will make a huge difference, but a large reserve account might be the compensating factor to a lender.

If that’s what you want and can afford it, I’ll get you the best rate that I can, and try and get you qualified.

100% LTV
$550,000 Loan Amount with 620+ Score
$750,000 Loan Amount with 660+ Score
Full Doc or Bank Statements
Self Employed & Wage Earner
620 Score (VOR Waived with 660+ Score)
No Reserves!
No MI!
50% DTI on Fixed Rate Products!
Seller Contributions Allowed up to 6%
Gift Funds Allowed!
No Payment Shock Requirements!

QUALIFYING is the key. Need to know more about your situation.

Please email me at [email protected] with your contact info, including phone number, and I’ll be happy to give you a call. Thanks.

[HLS]

Thank you! Please don’t misunderstand. I have no problem with either of you.
I’m aware of SDR and SD R, I respect you both. (Figured it out on day one)
I was in no way referring to either of you. I WILL respond to you both.

I value any good nature debate, and everyone is entitled to their opinions. I respect a love-hate relationship!
Disagreeing is good!

There are others that go beyond opinion, with venom, that isn’t conducive to earning any respect or encouraging others to express their opinions.
It’s not hard for me to separate opinions & facts from babbling.

I’m not here to beg for business. Others should just realize that in fairness to all, they should keep their posts to facts and opinion, and encourage others to post the same way.

I don’t run or hide, nor do I expect posts to be moderated, and I’ll be happy to try and earn respect here, as my time permits.

[HLS]

Thank you! Please don’t misunderstand. I have no problem with either of you.
I’m aware of SDR and SD R, I respect you both. (Figured it out on day one)
I was in no way referring to either of you. I WILL respond to you both.

I value any good nature debate, and everyone is entitled to their opinions. I respect a love-hate relationship!
Disagreeing is good!

There are others that go beyond opinion, with venom, that isn’t conducive to earning any respect or encouraging others to express their opinions.
It’s not hard for me to separate opinions & facts from babbling.

I’m not here to beg for business. Others should just realize that in fairness to all, they should keep their posts to facts and opinion, and encourage others to post the same way.

I don’t run or hide, nor do I expect posts to be moderated, and I’ll be happy to try and earn respect here, as my time permits.

[Author]

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