Rewarding bad decsion's,

[seapower]

This post is from a conversation with a leader of a "special" mortgage company. They are in the process of hiring approx 120 new loan processor's to handle the anticipated thousand's of new loan application's, spurred on by the new Obama stimulus package.
Here's the gist; If you were foolish enough (his word's) to have signed a variable interest mortgage loan on your home and now find youself in a bind, this plan's for you. The new loan will have 2%, yes, 2% interest for 5 year's, then it will go back to the normal rate (whatever that is). After the 5 year's, if you have made all your payment's on time, you'll get a $5,000.00 "reward" check to boot!
Now as stated several times before, I'm not a real smart guy here. But how come I have the "priveledge" as a tax paying citizen to bail you out and give you a bonus check (for doing what your supposed to be doing in the first place). No one has ever given me a FREE LUNCH, never asked for one, didn't expect it. I've played by the rules, never been late on a mortgage payment, business payment, account's ballance, paid the taxes owed, etc, etc, etc... I did what I had to, to stay current.
No one had a gun held to their head's to go out and borrow for more house than they could afford, much less get sucked into a variable interest loan. You can give me all the rational you want, that people didn't know what they were signing. BULL plain and simple. If you have enough smart's to sit across the table and go through the mortgage loan process you know exactly what you are agreeing to. Again no one had a gun held to your head, you put yourself there in the first place. By signing that type loan you were playing the ODD'S that interest wouldn't go up (or playing the average's). That's my point you were playing the ODD'S and the ODD'S bit you in the hind-part's. Read the fine print people, they are not GIVING you the money. Learn from your mistakes and don't expect me to bail you out, because you were hedging your bet's.
I know shut up and get back to work, the rest of the Countyneed's your tax money! Thank's alot, by the way which room of the house that I'm paying for is MINE!!!! Frank,SeaPower

[seapower]

What no help here????Frank

[marine4003]

Frank, Yup, your right...for the most part.Everyone wants to believe in the American Dream, but people are gullible and are willing to believe ANYTHING,given the right circumstances,and the right line of BS. My foreman and his wife went to a local independent mortgage office to get approved for a $120,000.00 home, his Beacon was low 700's, his wife , the same, they got into a 9.5% variable,with 40% down. No Doc. well, the broker told them there will be enough equity in the home to re-fi if the rate went up, seemed like a sure deal, that home is now worth 80K his monthly payments are $800 month,and i am barley able to give him 20 hrs a week, his wife was laid off from a managerial position..thereby loosing 2K a month income, so you want to blame the home owner....hell if you want to blame anyone blame the wall street greed,causing the whole Ponzi scheme to collapse, it was all fueled by speculation,and the Dream,not to mention unscrupulous lenders giving loans to people who didn't want to do anything worse than own a home, without getting into a huge debate...your right...but then so am i.....

[nautiduck]

Frank you got it right, you didnt need any help.

Marine What the hell were they doing signing a loan for 9.5% with 40% down with two scores in the 700s. 120k with 48k down they financed 72k and their paying 800 a month on the mortgage? I was offered (didnt take it) an undoc loan 7% fixed rate 0 down with our scores being in the 700 to 730 range. He definately did not look around. Why did he need an undoc loan with 40% down. Most banks would jump at a 40% down buyer with a lot lower rate with those scores.

[canyongear]

Frank,
I think perhaps, it was not only the mortgage terms that bit people in the hind..but the:

" I want a home equity cash machine like my neighbor, so whatever we have to do to get into a house let's do it, values just keep rising how can we loose? When the value goes up we will just refinance out of this adj. payment no income doc -5% down negatively amortizing 50 year amortizing starbucks with double triple frappe latte chocolate thunder loan we got into, okay hunny it will be fine, that's what Vinny did next door 3 years ago, look at them now, 2 Bimmers in the driveway, new pool and the kids are in private school..we need that too!"

Well apparently, NOBODY, from the town clerk who records the documents to the President of the USA and everyone in between, forgot that values can and do go down after a protracted appreciation boom.

I assimilate this whole mess to this:

Musical Chairs..the public running around the housing market, looking for a seat to sit in when the musinc stopped. Well guess what, there were no chairs left, they (Wall Stree) securitized the chairs right along with the loans, Wall Street and the US Govt, was running the record player and stopped the music and dropped the old 78 rpm disc on the floor and it shattered.

The Monkey (mortgage) chased the Weasel (Equity), caught the weasel and ate it.

Painfull lesson to be learned..and your right..these folks new exactly what they were doing by signing on the dotted line.

The recovery will begin when home values start to go up..and not sooner. No matter how much they throw at this mess..markets are markets and they are governed by supply and demand, not bailout loans with low interest rates and bonus checks..

Oh and one more little observation..HOUSES were always SAVINGS instruments when properly financed. A mortgage payment was = Principal plus Interest to reduce the mortgage balance..overtime it was forced savings by creating equity in your home.

This is the second time in my life I have watched NEGATIVELY AMORTIZING LOANS cost the American Taxpayer billions..I guess Congress forgot about that little fiasco back in the 80's that cost 750 Billion with the S&L crisis..

Those type of NEG AM..loans should have been outlawed then..I cannot believe this happened again..of course the mortgage marketers never called them NEG AM loans..they put a diffrent face on them this time..and sucked people in again..the problem with them is psychological..you get your monthly mortgage statement and watch your principal balance grow..and your home value go down..NOW who in their right mind is going to stay on that sinking ship?

Just boggles my mind...with the ineptness running our Country.

[B.C.]

Do you think it's just mortgage and housing? For as long as I can remember every year at Christmas the analyst and retailers look for holiday sales to increase by 5%. When they don't it's a bad year for retailers. The retailers and government have trained the American people to spend more than they make, and of course the credit card companies are right there to loan them the money. How long did they think this could go on? Couple that with the fact that we don't make hardly anything in the United states anymore and it's no wonder were in this mess.

[marine4003]

Frank you got it right, you didnt need any help.

Marine What the hell were they doing signing a loan for 9.5% with 40% down with two scores in the 700s. 120k with 48k down they financed 72k and their paying 800 a month on the mortgage? I was offered (didnt take it) an undoc loan 7% fixed rate 0 down with our scores being in the 700 to 730 range. He definately did not look around. Why did he need an undoc loan with 40% down. Most banks would jump at a 40% down buyer with a lot lower rate with those scores.

I wish i knew....what they were told...was the length of time the mortgage, as opposed to 30yr fixed,was supposed to give them greater return should they ever decide to sell. they bought it.looking at winning the lottery. false hopes false dreams, never consulted me or another broker, lost it all, i am in the process of using my credit to secure there home,not to mention $$$ , its worth it,my man has made me alot of money, boils down to a smooth talkin' BS salesman. wheres ethics anymore????

[Surfergirl]

I think that the government officials need to go back to their ethics training manual and read it over again!

http://www.usoge.gov/training/module...wbt_07/a1.html

[flatbottom]

Frank, Yup, your right...for the most part.Everyone wants to believe in the American Dream, but people are gullible and are willing to believe ANYTHING,given the right circumstances,and the right line of BS. My foreman and his wife went to a local independent mortgage office to get approved for a $120,000.00 home, his Beacon was low 700's, his wife , the same, they got into a 9.5% variable,with 40% down. No Doc. well, the broker told them there will be enough equity in the home to re-fi if the rate went up, seemed like a sure deal, that home is now worth 80K his monthly payments are $800 month,and i am barley able to give him 20 hrs a week, his wife was laid off from a managerial position..thereby loosing 2K a month income, so you want to blame the home owner....hell if you want to blame anyone blame the wall street greed,causing the whole Ponzi scheme to collapse, it was all fueled by speculation,and the Dream,not to mention unscrupulous lenders giving loans to people who didn't want to do anything worse than own a home, without getting into a huge debate...your right...but then so am i.....

I see the no doc an obstacle. Some reason was determined to choose a no doc. Hence the high rate. But ....the deal is done. here is a link to data for the home market..ups and downs. Notice the region or states requiring all of us to bail their azz out..... http://www.newyorkfed.org/mortgagemaps/

[cravertosu]

Hey Frank,

Stacy and I have that same discussion ALL the time! Why is everyone that messed up getting special treatment and favors while the rest of us that DID THE RIGHT THING get nothing? And not only do we get nothing, but we have to pay for those that didn't do the right thing and took the easy way!

Tim