BASTARDS! Raking in millions in BS loans that wind up in foreclosure. This is just SAD!

http://www.cbsnews.com/stories/2008/03/09/ap/business/main3919910.shtml?source=s earch_story

http://www.cbsnews.com/stories/2008/03/07/national/main3916355.shtml?source=sear ch_story

Ah, people willingly signed the mortgages, they should have read the print.

That's an awful lot of print to read. Mortgage brokers are just basically car salesman in better suits. They will knowingly put you into something knowing it will not work out. They will gladly sell you that Escalade when you can only afford the GEO.

When buying something as expensive as a house, you really should have your own lawyer or mortgage broker. Remember the real estate agent represents the seller, and has the seller's best interest at heart.

There are sleazeballs in every industry, and fasst talkers, but the ultimate responsibility is the buyer to understand what he/she is agreeing to.

The people that did these loans did so under their own freewill. Going to a buffet does not mean you should eat until you throw up. Same concept for buying a home. Just because you want to do it doesn't mean you can afford it! Anyone signing a document borrowing hundreds of thousands of dollars should give it more consideration than buying a cell phone or a pair of shoes.

But, when the govenement lives beyond it's means and finances wars with debt, what kind of example does this set for the average American who desperately needs to keep up with the Jones's.

Hey let's not have anyone watch out for the little guy!
SCREW them the best you can!
The GREAT American way....

The little guy screwed themselves. Nobody forces anyone to buy a home or take a loan. If you are unable to figure out for yourself whether you can afford a home and the payment associated with it, then you should continue renting. My answer to someone wanting to buy a home for $600K with nothing down is that you can't afford to buy ANY home if you can't save up some sort of down payment. People are constantly in search of "something for nothing" and when it comes to borrowing money, nobody lends it for free and you can be damn straight that big trouble lies ahead if you can't make the payments YOU AGREED TO.

If you are unable to figure out for yourself whether you can afford a home and the payment associated with it, then you should continue renting.

If 70% of the population is dumb then your going to get this... It's just too bad that companies like this can take advantage of STUPID people.

The STUPID people took advantage of the companies AND themselves. Both parties are now paying the price.

Mortgage Company Heads Grilled By Congress

I'll have mine medium-rare please and BBQ sauce on the side!

Tastes like Chicken!!

HEY!

Not cool.

I can tell you that I own a mortgage company - things aren't exactly fun. We are better positioned than most and will be able to hang in there relatively well...but it has changed...ALLLLLL for the better too.

Amus: Tastes like Chicken!!

CJ: HEY!

Not cool.

That's funny!!! (I had to read it several times before I got it! I'm a little slow sometimes!)

DAMN SKYBILL, I had to work and he stole my line!!!!!!!

CJ, can you elaborate on the changes for the better?

Being one of the multitude who bought their first house during the height of the mortage craziness, I'm inclined to say that it's mostly the purchasers who are at fault (with a dash of fault for misleading mortgage brokers thrown in). I was tempted to go with the ARM, but in the end I opted for a fixed rate at the urging of wise people who I trusted. I was encouraged to "buy as much house as I could afford" (meaning buy a more expensive house!) but I chose to buy in a lower cost area to keep my payment down. In hindsight I'm glad I did.

Things are being for the better in the sense that lenders ( the people who actually hold the note ) cannot and will not be able to provide risky-to-them nor risky-to-the-buyer loans any longer. In fact, right now, relatively safe loan programs are being scrutinized. Which is fine as it will only strengthen the industry as a whole.

It's getting better in the sense that flaky mortgage brokers who don't have a solid client base from which to draw new business will go the way of natural selection (read; They were in it for a quick buck. Now they can't survive ). Which is also good.

FHA loans are going to be tweeked to a degree that will help open up some doors for some without the Government having to create anything that even smacks of a bail-out.

I repeat; There is nothing going on that even remotely defines this market as worthy of a bail out. Nor is one being offered. Don't let anyone tell you different. Only trust me. Only do what I say...here...have some Kool Aid. Seriously though, there is no bail out happening. Relaxing some FHA and VA loan program guideline does not constitute a bail out.

Oregon's situation is better than most states in the nation.

I'm not downplaying what is going on. I'm keeping it in perspective though. Much of this problem ( or at least the immediate problem ) will just plain happen no matter what anyone does. So be it. Lesson learned.

The larger problem of trying to fix any kind of mindset issue will take longer to fix. You can't but a million dollar house and expect to sell it in a month for 1.1 million.

And not to bring too much politics into it - but I want to say this out loud at least once; I honestly believe that the mindset of " get rich quick " in the mortgage industry ( among buyers and brokers ) was a direct result of a genuine panic among Americans at a time when just about everything going on in the world pointed to " You'd better get your act together. Something really bad is happening and there is more coming." It was the real estate equivalent of " hoarding " and " gauging " in a time of crisis. Or at least I believe it contributed to that mindset to a great degree.

I'm not saying that that mindset was absent before - but it was really honed while Bush fumbled on many policies - Domestic and Foreign. I think it created a perfect storm within the psyche of MANY Americans and we got a little flash of how things could go down.

I think and believe that is part of what Obama brings to the table; An offer to be rewarded for hard work ( instead of a quick buck ), a chance for a clean slate emotionally, a fresh start. A willingness to see things for what they really are and some transparency.

I could go on and on - but I feel better about our future than I have in a long time. And this is coming from someone who feels burned, personally, by Bush and I make my livlihood in an industry that is under the microscope right now.

heck, if I can feel positive under these circumstances, there has to be SOME new reason for it.

Obama in 2008, man. We gotta try.

The grilling I'd like to see them get involves charcoal.

How is it the mortgage companies fault, at the time the people probably celebrated getting a loan so they could buy their own house.

Unfortunately, many of the people aren't smart enough to know what they can't do so someone has to put on the brakes.

If was ridiculous what companies were doing to loan money, which has now put all of us a economic risk, let alone their shareholders.

In my area, you could get a 100% house loan 24 hrs after wrapping up a bankruptcy. Others were repeatedly offered 110% loans. That's the full price of the house plus 10% to spend moving in.

Nwokie, while you and I are probably pretty much of the same political viewpoint, I think this was a case of everyone loosing their heads and now they're going to lose their ass.

This homeowner is thankful to be out of his mortgage.

That's awesome Chris! You'd make Dave Ramsey proud!

I wish I could say the same thing.

Mine will be gone after I win that 275,000,000.00 dollar Powerball this weekend.

Everyone assumed real estate prices would keep going up, which meant that if someone got into trouble, financially, they could simply sell the house, and everyone would still be ahead. When housing prices dropped below the mortgage is when the trouble started.

Please stop for today.

Dave Ramsey is a jackass. I much prefer Suze.

Chickenjuggler the trend or trouble that we are now trying to repair and or change when did it begin? What year/s?

Why is Oregon in such good shape versus the rest of the country?

I am asking you for your input because you are most likely the most educated and experienced on what is currently occuring in this country when it comes the the real estate woes.

How carefully do people need to approach the purchase of a new house?

Could the television industry ie cable network shows on TLC and HGTV be to blame for our current situation in that they all glamourize the "House Flipping"/Rehab trend?

Good questions Shy. Let me ask this too. Are we talking new homes only?

One reason for Oregon (Portland specifically) not getting hit so hard by the housing market collapse is the Urban Growth Boundary. This creates a forced scarcity that helps to prop up values. The UGB also probably reigned in the kind of speculative construction and development that other parts of the country have seen over the last few years, meaning less excess housing inventory.

The Portland market is holding up for several reasons.

1. We never saw the huge gains that some other markets saw due to speculator hype. Yes, we saw healthy increases, but not like what occurred in LA, Vegas, etc. The higher and faster you grow, the harder you fall.

2. Portland's population continues to grow, which helps keep demand for housing robust.

3. Portland's economy is doing well and is diversified.

4. The urban growth boundary has helped to put a lid on speculative development and limits the amount of buildable land, which keeps the inventory low. Combining this with population growth makes for a good housing market even when things are soft nationally.

5. We have less subprime mortgages in play as opposed to other cities that are seeing drastic declines. Stable loans with people that are able to pay them means a stable market without rash decisions and fire sales.

6. The median prices of homes in Portland falls under the conforming loan amounts ($417K Fannie/Freddie) along with FHA, which just increased their limits in Portland to the conforming limits. These are the only stable sources of funding right now. High priced markets are getting their asses kicked because jumbo loans are harder to get and cost more than they used to.

7. Portland always seems to be a year or two behind the trends nationally, so don't you worry, we'll see some pain. Short sales are happening more and more, and this will hurt all homeowners as those comps drag down everyone's values. Those that bought homes in the last year with nothing down, or those that bought above $500K better be prepared to stick around in their homes for a while, and they better have stable jobs and fixed rates on their loans.

"How carefully do people need to approach the purchase of a new house?"

Very carefully! Buying a home is the largest financial decision most people will make in their lifetime.

"Could the television industry ie cable network shows on TLC and HGTV be to blame for our current situation in that they all glamorize the "House Flipping"/Rehab trend?"

Not really. Historically low interest rates and ridiculously stupid mortgage guidelines prompted this mess and created a frenzy similar to the dot com stock bubble. I also believe that people were looking for somewhere else to invest their money coming off the dot com bust in 2000 and figured housing would be the way to go. For some it worked out, for the others, it won't.

Chickenjuggler the trend or trouble that we are now trying to repair and or change when did it begin? What year/s?

About 3 years ago when rates were very low and lenders were relaxing all sorts of underwriting guidelines.

Why is Oregon in such good shape versus the rest of the country?

Mostly because there was legitimate interest in Oregon property from out of stater's who were cash flush from the sale of their homes in other states. It also has to do with Oregon hadn't experienced a big property value gain that much of the west had been seeing. So when Oregon was getting to be " trendy ", it created a good situation for sellers.


I am asking you for your input because you are most likely the most educated and experienced on what is currently occuring in this country when it comes the the real estate woes.

How carefully do people need to approach the purchase of a new house?

It's not just new homes. At least not in my experience. Oregon is still seeing an increase in property value. It has leveled off - but it's reasonable now. Salem was the #1 area of the country in 2066 for home appreciation. 24%. Portland was 12%. It was very tough to find an investment that could pay off like that. It was a quick spike and poeple who got greedy were at raisk for getting burned. But to answer your question; About as carefully as you can. It depends on why you want to buy a house that will dictate if it's a good idea for you. I've talked a lot of people OUT of buying a house. NOW they care back with a more realistic approach and NOW I can really do them a service. Our shop does and did VERY few subprime loans. There's a long story as to why we did that - but it worked for us and our clients.

Could the television industry ie cable network shows on TLC and HGTV be to blame for our current situation in that they all glamourize the "House Flipping"/Rehab trend?

No way. Improving your house is still a great way to build equity in your home. It's unrealistic to think you can get the sort of gains that you could get for about a year there. Still not a bad thing though.

And Vitalogy; Yes on just about all your counts there.

Specifically when it comes to my comment on buying a new home what I meant by "new" was not a newly constructed home but instead oppurtunities for first time buyers. Very modest homes that are not extreme or extravagant. A home that the buyer plans on living in for the rest of their lives. Are prices going to dip further, is it a wait and see game? So as in new meaning a already existing home.

Man, if you find a house that you like and can afford - and you like it more than where you are currently living- There are only a few reasons I can think of why you shouldn't try and see if you can or want to buy it.

Prices around Oregon are going down ONLY because there is a glut of unoccupied homes and they need to sell them. It's a geat time to be a buyer - I'll put it that way. But I don't think homes around here are going to drop in price much further. Once that inventory has stabilized, the balance will shift more towards the sellers.

Plus, you can ALWAYS make an offer and put the decision in the seller's hands. They can't always sell it for what they want or owe. Depending on their situation, they may just be tired of making payments on that house and will do what they can to make it fair for everyone. But that is up to them to decide. They are the ones with the motivation to sell.

And if you find a decent mortgage broker, your options for a loan have not dried up. Just be smart about it. No need to rush or panic because you think you are missing out on some phenomenal deal. Get a stable, fixed loan and sleep at night. Save some money for a downpayment. heck, call a mortgage broker and have them run realistic numbers for you against your income and credit. It doesn't cost you anything to do that. Find out where you REALLY stand. But once you find a house, and you like it, if you can, buy it. You'll have no regrets. It's a big deal. But the system is truly designed to make sense and be, you know, normal.

CJ- I'd like to keep the name/number of a good mortgage broker in my back pocket, just in case. Could you email the contact info?

Thanks...

LOL.

Subtle. I like it.

Email sent.

I have THE mortgage broker to end all mortgage brokers and I have a 5.35% to prove it with!

Mortgage brokers do not create the rates, the market does, so good work on your market timing.

My house is paid off.... Has been for 7 years....