• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Cruel Jokes, and No One Is Laughing

Status
Not open for further replies.

moh malekpour

Thread Starter
Elite Member
Joined
May 25, 2002
Professional Status
Certified Residential Appraiser
State
California
Cruel Jokes, and No One Is Laughing
WHAT do banks call it when a troubled borrower abandons her home, sending them the keys?

“Jingle mail.”

And what do they call it when an irate borrower abandons his home, yanking electrical outlets from walls, leaving faucets running and otherwise trashing it on the way out?

“Taking the inside of the house with you.”

There’s nothing like black humor to define — however sadly and starkly — the blows that keep on coming in this mortgage debacle. But make no mistake, lenders are only beginning to learn how to manage the onslaught of jingle mail and houses turned inside out.

Investors, homeowners and regulators have greeted the new year hoping that the worst of this financial nightmare is over. Some investors may even view Bank of America’s planned bailout of Countrywide Financial last week as a sign that it is safe to wade back into financial services stocks.

But while other economic crises over the last decade were resolved relatively quickly and cleanly — the Mexican peso mess, the Russian debt debacle and the dot-com implosion — the unraveling of the great home mortgage boom is significantly more complex. There are infinitely more moving parts to this problem, and it will take far longer to right.

For example, while it is widely known that a wave of subprime adjustable-rate mortgages, or A.R.M.’s, will reset this summer — raising the specter of further foreclosures — an even more troublesome mess involving pay-option adjustable-rate loans lies well beyond that. These are the kooky loans that allowed borrowers to make payments that were a fraction of the interest owed, without paying back any principal.

Only when the loan balloons to 15 percent larger than its original size — a nifty development that results from a multisyllabic quagmire known as “negative amortization” — do lenders demand that borrowers pay down principal. In many cases, this will cause borrowers’ monthly payments to double, according to analysts.
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
As I have said, this mortage meltdown, sub-prime crisis, foreclosure crisis....what ever you call this MESS is not the result of a CYCLE. This is NOT a cycle.

In order to be a cycle, something must be repetative and have happened before.


This country has NEVER seen this perfect storm before.

Sub-prime mortages, extensive mortage fraud, No-Doc loans, Zero Down loans, mortgage brokers.....most of this stuff barely existed 25 years ago, some of it even 10 years ago.

This might prove to be a new cycle and be repeated in the future ....but it is not as of now.
 
Last edited:

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Investors, homeowners and regulators have greeted the new year hoping that the worst of this financial nightmare is over.

Over??? hardly....... it just began. Sub-Prime is barely the tip of the iceberg......

when those parties - especially the "guardians of the public trust" WAKE UP, smell the roses, and READILY admit the exact same mechanisms, players, and INCREDIBLY unrealistic, skewed, and automated NONSENSE has already Infected ALL the Residential Mortgage Markets........ and TAKE ENFORCEMENT ACTION - the result will make the Sub Market fiasco pale by comparison.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
unraveling of the great home mortgage boom is significantly more complex.
exactly...stocks can fall or rise overnight. Home prices changes relatively slowly because they are not fungible. These mortgage securities therefore, can change wildly overnight without the underlying property value moving.
This country has NEVER seen this perfect storm before.
While it is true there are unique features related to the way loans are bundled. But the depression era saw similar lax regulation and fraud. The banking laws of the 1930's were a direct result of unregulated banks taking advantage of borrowers and depositers. Today, banks are once again deregulated and promised to be good boys and girls. In truth they fall back upon creating even more exotic schemes which eventually overload the system and fail. That part is not all that new.
 

Scott Kibler

Elite Member
Joined
Oct 7, 2003
Professional Status
Certified Residential Appraiser
State
Illinois
Jingle mail. I like that. It has a festive sound to it.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks