I started to answer a comment on one of my bloggs, and as so often happens when I'm commenting I got a little carried away. I posted the comment, but the more I looked at it the more I wanted everyone to see it, so after a short edit here it is.
Those that blame mortgage brokers for those nasty sub-prime loans forget that Borrowers received a "Good Faith Estimate" and "Truth in Lending" form when they applied for a loan or within 3 days there of! When a mortgage broker, submits a file to a wholesaler they will also send the borrower a GF & T in L!
If the broker or the lender make
any changes to the program, the borrower should receive these disclosures again. At closing there will be two more sets of "GF and T in L" forms one from the broker and one from the lender in addition to all of the other disclosures! All signed by the borrowers, everyone stating that they, the borrower, understand the disclosure. Between the application and closing the borrowers will have signed 40 to 50 times, EACH that they understand what they are getting! Yes, many will only remember the bottom line, but are we going to punish everyone because some are extremely stupid?
There is not a problem with the application or closing process. Borrowers know what they are getting!
The problem is human nature! When the buyer stops making the payments, he never believes it's his fault! Never, never, never, never!
Yes, there are some crooks and total incompetents, but I'm unsure how much of the foreclosure problems they caused, the borrowers signed their papers too! Some people have been screwed, but they lost their house because they stopped making the payments they agreed to.
I feel very sorry for the people that lose their home, but to put the blame on the mortgage industry is absurd!
Thanks to the sub-prime mortgage market, we have a higher percentage of home owners than at any time in our history! Those nasty loans and the brokers that sold them have expanded home ownership beyond anyone's dream! For all the negative press it's important to remember that 80% of those so called "undesirable, unqualified, undeserving would be home owners have succeed!
To all those calling for reform, I suggest: As you leave home count your first 24 neighbors, now look back towards your home, carefully study all 25 homes, odds are 5 of them were purchased with those nasty sub prime loans! One of those 5 is in trouble and may lose their home, but 4 have homes they couldn't have any other way. The 1 that stops making his payments will be gone. Now, which 4 of your reaming neighbors are you going to get rid of? Would you really deny 4 families homes of their own, just so you don't have to feel bad about the one dead beat?
This whole issue is class and race bigotry! How dare those undesirables think they dissever to live like their betters!
If we eliminate the sub-prime market, in the name of "consumer protection," we can force those people back in their place!Now do you have any question on where I stand? If you do I want you to leave home tomorrow morning in the other direction and count 24 more neighbors
. Keep in mind that your home is included in this group too! By the end of the week, if you go in the remaining directions, you'll not only have 4 neighbors losing homes to those nasty sub-prime lenders but at least 1 losing it to a conforming lender! If we can protect another 16 families out of their homes, you won't have to deal with undesirables, or just maybe your neighbors will have one less! Bill
William J Archambault Jr
The Real Estate Investment Institute
http://www.reii.org
Bill
William J Archambault Jr
The Real Estate Investment Institute
wja@reii.org Cell 832-259-7078, Houston 832-582-8415, Las vegas 702-516-1569
From my past: GRI 1975, FLI 1974, Catalyst from a client 1974 an agent that makes things happen, REII, The Real Estate Investment Institute 1995.
©William J Archambault Jr ©The Real Estate Investment Institute ©REII
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40 Comments on Arrogant Bigots
Bill, Bill, Bill,
Well sir.....great job...it deserved a feature! No mincing of words or thoughts here. I could probably say...Bill you've out done yourself here but I know that there is more to come, if and when it's called for. This post/message should be sent/emailed to every politician that is weighing in on the "sub-prime" meltdown. It's worthy of a bookmark as well. Keep'm comin!
If 20% of homes were in jeopardy of foreclosing due to the closure of major employers in a specific area, as happened in Denver in the '80's, lenders would not be viewed as the "culprit". Lenders had no more control of a market shift (from bulging equity to negative equity) than the local florist did. While I'm very sympathetic to those losing their homes, they'll rebound and buy another in seven or ten years when the market returns- and the lenders and real estate community will be there to assist, as that is their JOB.
Interesting...
I think we need to better educate consumers out there...since it is "Obviously ALL THEIR FAULT"
We need a disclosure.....
1. Note the word 'professional' in the RE buisness is a reference to making money off of your transaction not making sure you are doing the right thing
2. When you hire us, you are hiring us to make a deal happen, not to give you a good product, good advice or anything short of the legal minimum disclosures
3. In the name of equality, we are doing our best to give you an equal chance to screw yourself and your finances. We will NOT discriminate...if you have a pulse we can make a deal. After that we are not responsible if you still dont have a pulse
4. Remember the advice we do give you is just the same as the used car guy...we tell you what we need to o to make you buy...and within some lose legal restrictions
This way, we can be completely clear that we are not responsible
Bill... yes, great examples of when you were in business back then, that people found a way when things were even worse. This is not mentioned in the news at all... but that everyone are crooks, because if they don't get the lowest rate, they got ripped off. Now... nobody talks about the less than perfect credit people, that this is not possible most times.
The problem was that the client didn't always get the next best rate, but just for the fact that they were slammed into the easiest loan with the worst rate. This is where the problem occurred. Or... the bait and switch thing occurred.
they say that for every law suit against a lender, they add one page to our loan applications...
I'm astonished at how many times I get yelled at in the course of a month by people whose credit has an issue and I bring it up. I didn't hurt their credit! I didn't miss a credit card payment! I didn't repo their car!
And... I didn't sell them a loan they couldn't pay!! They made that decision on their own. Whether a job cut, injury or just plain "I don't like banks" mentality... I prequalify them knowing that they can afford it even without a job for a short while! If they miss the very well documented and discussed adjustment date, that's not for a lack of effort on MY part!
not every loan originator is the same... but I agree - there are some classes and types of people that will not be homeowners should laws keep getting tighter and it is discriminatory. It is THEIR CHOICE to get a higher interest loan... and it is my DUTY to help them get one that will not hurt them
Rich,
Thanks for letting us know. I'm glad we're speaking again.
Ron, Ron, Ron,
Thanks for the kind words. Feel free to forward it.
Lauri,
Thanks for pointing out that forclosures can because by things outside the control of the lender or the borrower.
I hope we hear from you more often.
Jason,
Your comment has me confused.
If you're being sarcastic, it's great. If you're serious, it's indicative of the problem.
I went to your page and I understand the need for anonymity. (Quite Kid) but I still don't know how to react.
Jeff,
I think the problem is that most don't understand what is the "best rate" and that most often it's not the lowest rate! Most people think the lowest rate is always best, well that's only true if the cost is equal! HUD has us looking at APR but that number is only true if some one fully amortizes the loan. How many mortgage burning parties have you been to?
Real estate services at all points is only as good as the integrity of help. That has always been the case and always will be. No laws or rules can change it.
That's the nice thing about AR, I've meet a few people here that I'd trust my life with, and that's the type of faith we all need in our real estate and mortgage people.
Just in case our readers haven't read enough of our stuff, Despite the FHA, your on the short list.
David,
I don't believe it. My new application and closing package only has 1,131 pages surly there have been more law suits. God, lets hope so our daughter is a new attorney.
How can you question someone's credit all their payment are up to date today, and they got 3 new credit cards in the mail last week. Why just yesterday they got a new hybrid and the dealer financed them despite being $10,00 upside down on their trade in.
Everyone deserves a chance at home ownership! If you don't conform though, except to pay for the extra risk.
Jacqulin,
Thank you. We should meet one of these days, Vegas isn't that big after all.
Celeste,
It sounds patriotic, I love it.
Bettina,
We all "wish people took responsibility for their actions" the best we can hope for is that we are not made responsible. People need to know that if they don't understad something that Experts Work Cheep...Ya
Bill
William,
You go right to the core here. Yes, the subprime market gave those with poor credit an opportunity to own a home. Most of these borrowers are living up to their promise to make payments. It's a small percentage that has difficulties and their argument that they didn't know what they were getting into is rather shallow.
Esko,
Well said.
Bill
I wrote on almost the exact same topic and got like 2 comments...maybe I should start calling people names and I'll get more comments, ya think? ;-) Great post! It's actually, very much common sense. If you get the chance, check out my blog and you'll see several posts on similar topics.
Bob Mitchell
ValueList
Bob,
I can't tell you how to get comments, I surely don't know.
Personally I don't get involved in name calling!
I do practice truth in labeling.
I went to your page and didn't find the blog you mentioned, please write back with a link so all of us can enjoy it.
I did see several including my friend Chicken Little.
I hope to hear more from you.
Bill
Chicken Little and The Big Bubble 9-27-06
I have to post on this. When we bought our home, we had to go subprime (2/28), not because of poor credit, but because of short credit history. After closing with ridiculous interest rates, fast forward to 6 months later when we refinanced (5/1 @ 4.75%). We knew EXACTLY what we were getting into, but we went in with a plan to get out of it long before the ajustable kicked in after 2 years, just as we knew we weren't going to stay in the house more than 3-4 years, so a 5/1 was the best option. We couldn't have bought our house at that time without the subprime, and timing was of the essence. Had we waited until we could go "A" paper, we'd have lost 3 years and $100K in equity. So thank you, Subprime Lending Industry.
And I completely agree that no one wants to assume personal responsibility anymore, but you can blame that squarely on the collective no-one-should-ever-have-bad-feelings mentality where GOD FORBID you should have to accept blame or responsibility for anything. These days, this idea is ingrained early on -- witness the amount of children's sports leagues where they don't keep score so "no one gets upset." Didn't do you homework? Well, the school just gives out entirely too much work. Overweight? Must be McDonald's fault. Didn't pay your mortgage on time? Well, that wouldn't happen if the mortgage company would change the due date.
Monique,
Thank You for sharing.
Bill
Bill - Late to the party here! An excellent post! Many got into their homes thinking they were going to cash out in a few years or make a quick buck in real estate. They took any loan they could get, thinking next year would not matter. I have worked with great Realtors and Loan Officers who had absolutely NO control over the client who had their mind made up to get a home at any cost.
These situations were rare, but NOW, the market has changed and someone needs to be the fall guy.....why not the subprime lender? or the Realtor? BTW - I don't think it has anything to do with bigotry.
Sandra,
Thank you for the kind words!
There are a lot of great people here on AR, judging from your troubled clients coming back to you you're one of them.
You may not have the experience yet, but you'll get there. Sincere people can and do get help here.
Best of luck.
Bill
For our readers Sandra refers to her blog What's the Difference Between A Foreclosure and a Deed In-Lieu of Foreclosure?
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