I don’t understand! If a bank lends the home buyer money to purchase a home and the purchaser makes payments for some period of time but ultimately has to default on the loan, doesn’t the bank make money? It receives the payments, forecloses on the home and can then resell the home to another buyer. If the market is depressed, can’t the bank retain the home as an asset until the market returns to normal? So, if these statements are true, how can the bank blame loan defaults as the cause of the failure?
Since your statements are NOT true, your whole premise falls apart.
If the bank lends $80,000 on a home and the buyer makes payments for a few years, no they haven’t paid back anywhere near the amount they borrowed, so the bank loses money if they can’t sell the home for what’s still owed and that’s often the case. And the bank’s business is lending money, not holding real estate for years hoping it will go back up to what someone owed on it when they quit paying. And you’re forgetting that for that time the bank would have their money tied up in that house.
On some foreclosures the bank might make money, but in the falling housing market the last few years, typically it’s been a loss. Many loans were given to people who couldn’t afford them in the first place. This is partially the fault of the buyers, partially the lenders who should have known better than to make these loans, and partially the fault of the government who strongly encouraged the lenders to make marginal loans.
I am trying to get a mortgage loan for 45000. I am currently unemployed but i have a very good credit score and excellent credit history. I have 4 months of unemployment left. Im trying to purchase a home for 64000 and use it for rental property. I currently have 19000 in my bank account. What are the chances of me getting a loan???
None at all. Would you give someone that much money knowing up front they have no way to repay it? Come on, you must be brighter then that!
These two terms often confuse me. I need someone to explain this in layman’s terms. Thanks.
A "correction" is a polite way of saying a significant drop in values. This term is often applied to the stock market also.
A "subprime" mortgage is one provided to borrowers with poor credit and tougher financial terms than a traditional "prime" mortgage. This includes a higher than market interest rate, adjustable interest rates, negative amortization (the loan amount actually increases over the life of the loan), shorter length loans (less than 15 years), etc. These loans were provided to borrowers with little or no down payment and less than perfect credit. In exchange the borrower has to pay more for the loan. The people who offered these loans were not the ones who ultimately loaned the money so they pushed them hard to earn fees for taking the loan application. They also often fudged the facts about the borrower to get the loan approved. This is the result of a mortgage marketplace where the people offering the loans have no risk if the borrower ultimately can’t repay it. Fortunately, this kind of lending has totally dried up, but its also made it more difficult to get a prime loan and that has dramatically hurt the housing market.
I am a manager for a wholesale mortgage company. I have been in the mortgage loan business for 5 years. I love my job and the people I work with but as many of you know, the mortgage business is not doing so hot. So should I stay and hope it gets better while continuing to struggle or say forget it and move on and come back when its good again? And if I do move on what else is there to do?
From what I have found, it is always better to stick with something especially if you love what you are doing. I believe that when you love your work, people will see that and want to do business with you.
When he fails the simplest test….
"….violated Senate rules against knowingly accepting gifts. The rule has an exception for loans that are provided on terms generally available to the public." NOTE –"GENERALLY AVAILABLE TO THE PUBLIC"
So who were some of "Angelo’s Friends" for "special treatment":
Senator Kent Conrad – Chairman of the Budget Committee and a member of the Finance Committee
Senator Christopher Dodd – Member of the Committee on Banking, Housing and Urban Affairs
Senator John Edwards – Member of the Judiciary Committee
Alphonso Jackson – Secretary of Housing and Urban Development
James Johnson – Fannie Mae CEO
Clinton Jones III – counsel to House Financial Services
Franklin D. Raines – Fannie Mae CEO
Barbara Albrecht – Director Legislative Affairs for the Mortgage Bankers Association
Martha Belcher – counsel for Fannie Mae
Charles Campion – lobbyist for Fannie Mae
Patty Johnson – CEO Rebuild Together
Robert Sanborn – VP Fannie Mae
Robert O’Toole – VP Mortgage Brokers Association
John Potter – Postmaster General
and many more …
That doesn’t sound quite like "generally available to the public"
Sounds more like a specialized, designed list of public officials.
Friends of Angelo:
Countrywide’s Systematic
and Successful Effort to Buy
Influence and Block Reform
Staff Report
U.S. House of Representatives
111th Congress
Committee on Oversight and Government Reform
Darrell Issa, Ranking Member
March 19, 2009
http://74.125.95.132/search?q=cache:XCv9VlTRUqMJ:republicans.oversight.house.gov/media/pdfs/20090319FriendsofAngelo.pdf+countrywide+vip+loan+program&cd=10&hl=en&ct=clnk&gl=us&client=firefox-a
He hasn’t yet his violations are still under investigation along with some of the other people and corporations you listed.~~
There are two properties I am interested in. One was built in 1966 & the other in 1974. Is there a company out there that does first mortgages on older manf. homes? I have a down payment well over 20%. Please help
call greentree fiance, also countrywide does mobile home loans expect to pay a higher interest rate a i966 and a 1974 will not have much value , I would bet less than $10,000 . the value is in the land. that is what someone will loan money on
I know that the normal course of action is for those notes to be sold to another lender for a large discount but is it possible to benfit as an individual for the decreased value of my mortgage lenders asset?
The notes are sold in a huge bulk, they are not divided up into individual notes. They can not be sold as you are dreaming.
Need a low a.p.r on re payment mortgage,cannot consolidate again!
http://www.moneysavingexpert.com/
It’s free to use, free of ads
You can find everything you need to know about money saving
The man who runs it – Martin Lewis, is a consumer god in my opinion.
Can you tell us what country you are in as I just assumed it was UK
We have an 80/20 mortgage and have tried to refinance with no avail. We did get a 3-yr loan modification, however, after that the price will jump back up again. And if they come after my husband, what do we do then?
It depends if you live in a recourse state or a non-recourse state. Recourse means that they can sue you in civil court. 2nd mortgages are pretty much ALWAYS recourse loans…even in non-recourse states. Even if you live in a non-recourse state, the amount of money that you stiffed the bank for is considered income and the bank will issue you a 1099 for that. Some people are hundreds of thousands of dollars underwater. How would you like to pay the taxes on that? Next time, buy a house you can actually afford. Rates are at all time lows and you STILL cannot afford your house payments.
They were worthless stacks of paper to inflate their balance sheets and, thus, qualify to make more loans and investments. They got around the law for required assets with mind numbing bs. Pure smoke and mirrors. They found a way to get more and more leverage.
The banksters are still lying, my friend. It is worse than they say. If carefully audited, these worthless mortgage notes will be determined to be be nearly worthless to completely worthless. Lies, lies and more lies.
Yep, it’s all a numbers game, Enron used the same thing but was closed down because of it. The banking system is getting away with it and we’re buying the BS.