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August 30, 2007 at 12:15 AM in reply to: Freddie Mac agrees to accept some Alt-A loans = mini bail out = badnews #82535
TheBreeze
ParticipantI think Gunnery Sergeant Hartman from the movie Full Metal Jacket summed up this whole situation pretty well after he found Private Pyle’s footlocker unlocked:
“If it weren’t for dumbasses like you, there wouldn’t be any thievery in this world, would there?”
ParticipantSo how does an ‘undocumented’ person go about getting a loan? Do they ‘borrow’ someone else’s identity? I hope my credit score isn’t negatively affected because one of the undocumented decided to borrow my identity and then walk away from ‘their’ obligations.
Is ‘negatively affected’ too harsh of a term when used in the context of the undocumented? Perhaps I should have said ‘non-positively affected’.
ParticipantSo how does an ‘undocumented’ person go about getting a loan? Do they ‘borrow’ someone else’s identity? I hope my credit score isn’t negatively affected because one of the undocumented decided to borrow my identity and then walk away from ‘their’ obligations.
Is ‘negatively affected’ too harsh of a term when used in the context of the undocumented? Perhaps I should have said ‘non-positively affected’.
ParticipantSo how does an ‘undocumented’ person go about getting a loan? Do they ‘borrow’ someone else’s identity? I hope my credit score isn’t negatively affected because one of the undocumented decided to borrow my identity and then walk away from ‘their’ obligations.
Is ‘negatively affected’ too harsh of a term when used in the context of the undocumented? Perhaps I should have said ‘non-positively affected’.
ParticipantWouldn’t a 100% loan with a 2- to 5-year teaser rate be the best way to go as a borrower? You get 2 to 5 years to see if your house goes up in value. If it does, you sell it and cash out. If it doesn’t, you walk away, without much lost. With a 100% ARM, the borrower gets the chance to profit if the house value goes up and doesn’t lose much if the house value goes down.
20% down loans were for suckers during the bubble (03-07) years.
ParticipantWouldn’t a 100% loan with a 2- to 5-year teaser rate be the best way to go as a borrower? You get 2 to 5 years to see if your house goes up in value. If it does, you sell it and cash out. If it doesn’t, you walk away, without much lost. With a 100% ARM, the borrower gets the chance to profit if the house value goes up and doesn’t lose much if the house value goes down.
20% down loans were for suckers during the bubble (03-07) years.
ParticipantWouldn’t a 100% loan with a 2- to 5-year teaser rate be the best way to go as a borrower? You get 2 to 5 years to see if your house goes up in value. If it does, you sell it and cash out. If it doesn’t, you walk away, without much lost. With a 100% ARM, the borrower gets the chance to profit if the house value goes up and doesn’t lose much if the house value goes down.
20% down loans were for suckers during the bubble (03-07) years.
ParticipantWow, this is very interesting. Over the past few weeks, all we’ve heard is that the lenders have cut back their business to focus on conforming loans only — those that could be sold to Fannie Mae. If Fannie cannot buy anymore loans, does this mean that the mortgage origination business is about to shut down altogether? No one will be able to get a mortgage?
I think that would be fantastic if that were to happen, but I fear that such an event would force Bush or someone to raise Fannie’s limits. It’s almost guaranteed that the taxpayers are going to be stuck fixing this mess in the end.
ParticipantWow, this is very interesting. Over the past few weeks, all we’ve heard is that the lenders have cut back their business to focus on conforming loans only — those that could be sold to Fannie Mae. If Fannie cannot buy anymore loans, does this mean that the mortgage origination business is about to shut down altogether? No one will be able to get a mortgage?
I think that would be fantastic if that were to happen, but I fear that such an event would force Bush or someone to raise Fannie’s limits. It’s almost guaranteed that the taxpayers are going to be stuck fixing this mess in the end.
ParticipantWow, this is very interesting. Over the past few weeks, all we’ve heard is that the lenders have cut back their business to focus on conforming loans only — those that could be sold to Fannie Mae. If Fannie cannot buy anymore loans, does this mean that the mortgage origination business is about to shut down altogether? No one will be able to get a mortgage?
I think that would be fantastic if that were to happen, but I fear that such an event would force Bush or someone to raise Fannie’s limits. It’s almost guaranteed that the taxpayers are going to be stuck fixing this mess in the end.
Participant“I dunno, I think this whole thing can be summed up as ‘lending money to deadbeats is bad business, no matter how much interest you are charging them’.”
If only your quoted statement were true, we wouldn’t be in this mess. The fact is that the teaser rates were very low, so in reality this whole thing can be summed up as ‘lending money to deadbeats is bad business, no matter how low the initial teaser interest rate.’
Participant“I dunno, I think this whole thing can be summed up as ‘lending money to deadbeats is bad business, no matter how much interest you are charging them’.”
If only your quoted statement were true, we wouldn’t be in this mess. The fact is that the teaser rates were very low, so in reality this whole thing can be summed up as ‘lending money to deadbeats is bad business, no matter how low the initial teaser interest rate.’
Participant“I dunno, I think this whole thing can be summed up as ‘lending money to deadbeats is bad business, no matter how much interest you are charging them’.”
If only your quoted statement were true, we wouldn’t be in this mess. The fact is that the teaser rates were very low, so in reality this whole thing can be summed up as ‘lending money to deadbeats is bad business, no matter how low the initial teaser interest rate.’
ParticipantSo during the last real estate crash, lenders became landlords? Were mortgages sold on the secondary market back then? I wonder if some of the mortgage holders today could become landlords if they wanted to. Take a pension fund that holds some MBSs for example, are they allowed to hold rental property? Would they even want to?
I also wouldn’t read too much into HLS’s statements. The tightening of the mortgage market has just begun. Sure some people can still get loans. But, there’s fewer people that can get loans this month than there were last month and there will be even fewer people who can get loans next month. The bubble took time to expand and it will take time to deflate. The stock market bubble of 2000 didn’t fully deflate until 2003, and we all know stocks are much more liquid than homes.
I don’t think we’re going to see a political bailout either. It does not appear that Bush is going to raise Freddie’s and Fannie’s conforming limits. So the Congress can pass all the bills they want, but if Bush won’t sign them, the limits won’t be raised.
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