1004mc And Comps

[TRESinc]

Additionally, the riskiest loan programs have been eliminated and the regulators are actually regulating the mortgage industry like never before (especially the bank owned mortgage companies). Undoubtedly, there is the danger that in the future as we get further and further away from the bubble and crash that people will forget and due diligence will be reduced and loan programs will be expanded in ways that increase risk to an unacceptable level.

it's already happening. a month or two ago fannie announced they will be doing 3% down loans. looks like my rental portfolio will be growing significantly in a few years.... again

 

[djd09]

why not 0% down?

 

[TRESinc]

why not 0% down?

go ask fannie.

 

[timd354]

What is the GSE's requirement percentage of loans made to borrowers below the median income?

Why don't you look it up for yourself? You could start by looking at FHFA's web site. Keep in mind that whatever the requirement is, that is not the GSEs' fault....any such requirements are imposed upon them by their regulator

 

[djd09]

Why don't you look it up for yourself? You could start by looking at FHFA's web site. Keep in mind that whatever the requirement is, that is not the GSEs' fault....any such requirements are imposed upon them by their regulator

It is never their fault. It is the appraisers. 30%, 40%, 50%, 52%, 56%, 58%. No more risky loans huh.

 

[Peter LeQuire]

Why don't you look it up for yourself? You could start by looking at FHFA's web site. Keep in mind that whatever the requirement is, that is not the GSEs' fault....any such requirements are imposed upon them by their regulator

It's a fact that the GSEs have been pushed to extend mortgages to people who do not meet underwriting criteria that for decades were considered prudent.

 

[timd354]

it's already happening. a month or two ago fannie announced they will be doing 3% down loans. looks like my rental portfolio will be growing significantly in a few years.... again

Yep, that was shoved down the GSE's throats by FHFA and has Mel Watt's fingerprints all over it. http://www.housingwire.com/articles...s-changes-to-open-fannie-freddie-credit-boxes

That is what happens when political people make decisions regarding mortgage policy. Hopefully, the number of 97% LTV loans will be relatively small (which they have been and likely will continue to be because the MI premiums for 97% LTV loans are significantly higher than they are for 95% LTV loans).

Hopefully, the regulators and the secondary market participants will be able to resist further attempts to loosen the credit/LTV box.

 

[The Bob]

The amount of due diligence that goes on at every level of the loan production process and on every aspect of the loan file is currently much higher than it has ever been. Additionally, the riskiest loan programs have been eliminated and the regulators are actually regulating the mortgage industry like never before (especially the bank owned mortgage companies). Undoubtedly, there is the danger that in the future as we get further and further away from the bubble and crash that people will forget and due diligence will be reduced and loan programs will be expanded in ways that increase risk to an unacceptable level. It is up to the regulators and the risk management people in the industry to keep that from happening.

You mean like they did last time?

What does "risk" have to do with it when you make loans to people that you allow to state their income and assets?
Or when you turn on the TeeVee and see stories about people camping out to be first in line to buy a new home, or stories about people flipping contracts on new construction in Vegas?
Or you sell them a loan that you KNOW they can't afford once the rate adjusts?

How much of the crash was due to "risk" and how much was due to stupid on the part of bankers?

 

[Peter LeQuire]

You mean like they did last time?

What does "risk" have to do with it when you make loans to people that you allow to state their income and assets?


How much of the crash was due to "risk" and how much was due to stupid on the part of bankers?

Well, you gotchyer liar loans, then you gotchyer stoopid loans, then you gotchyer DU to approve stoopid loans to liars, the resulting loans being bundled, sliced horizontally and vertically, then you gotchyer insurance on the slices of securities that nobody understands, sold to people who don't know what they're made of.............

To quote the Guinness guys, "Brilliant!"

Perhaps, the legal and regulatory framework will keep it from happening again, just like it did after the S&L crisis (or was it the SNL crisis?); just like it did when the subsidized HUD programs collapsed under the weight of fraudulent loans (ca 1971), just like it did after the section 608 fraud of the 1950s................. Unless there is some rooting out of fraud and criminal behavior from the lending/investment part of housing finance, we'll be going through the next round of musical chairs of "reforms" before Franklin Raines and James Johnson spend the money they crafted away from Aunt Fannie or Richard Syron from her half brother, Fred. Not the GSEs' fault? Any risk I pose to the integrity of the lending process, a particular lender, FNMA or the integrity of her database because I fat finger a key and report some property as a C3 rather than a C4 can't be measured, compared to the thievery that takes place upstream.