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Ptm

What is John McCain's solution to the mortgage crisis?

Jack:

As far as I can tell, and I am a mortgage lender and licensed Realtor, the first wave of the "mortgage crisis", of which a variety of governmental agencies were the architects, has past.

More than 250 major wholesale mortgage lending institutions has closed their doors, many tens of thousands of their employees have lost their jobs, and hundreds of billions of dollars in bad loans have been written down.

Underwriting guidelines have tightened. The FBI is investigating countless mortgage fraud cases. The real estate market has corrected itself in most markets. It is "safe" to buy real estate again, and there are loads of excellent buys to be had, if you know where to look.

You must realize that this did not happen in a vacuum. The government pushed for higher and higher LTVs (Loan-To-Value) with less and less money down required. The government pushed for more lenient lending practices (lower credit scores), and the hundreds of lenders catered to this market.

This also opened the door to crooks coming in with inflated appraisals to scam the mortgage companies out of their money. I would say that over half of all foreclosures are the result of mortgage fraud on the part of the borrower or a crooked loan officer and appraiser. Many of these foreclosures are NOT primary residences, they are non-owner occupied "investment" properties and "fix-and-flip" nightmares (driven by late night TV infomercial "gurus").

The other half of the foreclosures are due solely to the borrower. Whether it was their inability to comprehend the nature of the contracts they signed, their willingness to overstate their income (on Stated or No Doc. p[programs), or something as innocent as a health problem or job loss. In any case it was still their obligation to adhere to the contracts to which they had agreed or suffer the consequences. Not much room for "fudge

Reetu:

Great post. I am in the business as well. You hit most of the major problems. The only thing I would like to add is about what I call "renter's mentality". People got into homes with no money down. They had no idea(surprise, surprise) that home ownership is a lot different from renting. There is no one there to help you when things break and need repaired. Then when values started dropping, they owed more than the house was worth. What do some of them do? They treat the home the same as an apartment. They just move on. They have nothing invested in the home. Of course this is not true of all foreclosures, but I do see this a lot.

Ptm:

Inability to understand the terms? Maybe the terms should have been explained a little better

Jack:

mdogwalker, they are only explained two or three times during the mortgage process, they are also given copies of the documents two or three times at or before closing, and in the event of a refinance they have a three day rescission period in which to back out of the transaction. How much more accommodation would you like to see?

Nogard:

His solution came from his own lips:
"Let them get a second job & skip their vacation this year."
Talk about having empathy for everyday Americans!
Peace:)

Rick:

He plans on taking all the rich peoples money and buying off the loans of the people that were forclosed on. =Knowone deserves to have their home taken away.

Ptm:

Whatever you're smokin' I want some!!

QB Kate:

He won't need to have a solution, it will be history by the time the election is over, and he will be a very old man. Oh, he already is.

Jon:

Didnt these people who got the loans know that they were could get a bad deal in the end. Wasnt they warned about the chance of paying Higher Mortgages. I just wonder why we have to bail everyone out.

Ptm:

In many cases they were deliberately mis led. In other cases they weren't given a full explanation. The government was aware of many of these abuses, but stood by and did nothing. Legislation during the Bush administration practically legalized predatory lending.

Jack:

Your abnormal hatred for Bush aside, his administration did nothing to enforce or enforce "predatory lending".

Here educate yourself ...

http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea19.shtm

Mortgage lenders at the wholesale and retail levels all must conform to strict government legislation and overarching regulation. It is some of this legislation and regulation that actually encouraged borrower abuses and the abuses of a few renegade loan officers and wholesale lenders (who are no longer in business).

Noloki:

I don't think that man understands what's going on.
BUT, if you ask him, I'm sure he'd be able to tell you when Matlock comes on.

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