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One McMortgage, Please, With A Side of Lies

Not too long ago, getting financing for real estate was a lot like ordering FAST FOOD.

"One McMortgage, please". Sure enough, when you got to the drive through window, there it was.

So easy you could keep the conversation going on your cell phone all the way to the drive through window. So easy, you barely looked at the person who took the order. So easy you were not concerned about WHAT is was that went into your body, just how good it would taste.

And so cheap you could scrounge around the car and come up with enough change to get your McMortgage, and drive off blissfully.

Mission accomplished. You now own McReal estate.

You could get a McMortgage with a side of lies, or without. You could supersize your McMortgage. Heck, if one of those McMortgages didn't fill you up, you could get a junior McMortgage for only 99 cents and eat that, too.

Feeling stuffed? Wash it down with a sugar coated McDream and you were good to go.

Why would anyone take the time to learn to cook when food was so CHEAP and so EASY? Why would anyone consider the future health consequences of McMortgages?

Like most things that are FAST and EASY, it turns out McMortgages had very little nutritional value. But oh, they tasted GOOD, didn't they? Even if most of the people who ate them GOT SICK and GOT TOO FAT.

Now, we are in the middle of a national NUTRITIONAL CRISIS, and the menu is all different. Its, well, HEALTHIER.

You can't order with a side of lies anymore. Turns out that washing down a McMortgage with a side of greasy lies caused extreme indigestion. (Off the menu).

Supersize McMortgages are much more expensive, and you can't even order a Junior McMortgage. (Off the menu). And it takes alot more than just loose change to buy a McMortgage. You need green money, and lots of it.

Yes, the carefree days of drive through McMortgages are gone. There are still plenty of people who show up at the drive through window, but the window is closed. ACCESS DENIED. Now you need to go inside and sit down. Getting your food takes much longer, and you must engage with the one that is serving.

Lots of those drive through fast food places that served McMortgages are simply gone, out of business. They couldn't figure out how to survive in the new, HEALTHIER environment.

Is the food still cheap? Well, yes. But getting used to a limited menu of healthy food is tough when we gorged ourselves for so many years on fast food that was a nutritional disaster. Going on a diet to shed pounds is an uphill battle. There is a price to pay for betraying our health.

Turns out that cheap food wasn't nearly as cheap as we thought.

So slowly we wean ourselves with whole wheat buns, sprouts, and salads on the side. We don't like it as well, but we know it will be better for us in the long run.

We wash it all down with clear, purified water. The dream is still alive, but the sugar coating is gone.

Thank goodness. Nation, heal thyself.

Written by Janet Guilbault, California Mortgage Expert based out of the San Francisco Bay Area

Posted by Janet Guilbault California Mortgage Banker/Broker on 03/31/2008 06:43 PM

Comments (90)

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90 Comments on One McMortgage, Please, With A Side of Lies

MAR

2008

Janet - Very creative & realistic analogy here. "Turns out that cheap food wasn't nearly as cheap as we thought." Somehow, that shouldn't of surprised us. Let's only hope we don't get fooled again.

Wow! This is exactly what every homeowner and prospective homeowner needs to read! You found the perfect analogy here. McMortgages - you're just so clever!!!

Jason: I don't think we will ever return to the days of McMortgages. This price we are paying will sting for generations to come.

Hi Jennifer: Not clever, just living through it all and trying to have it make sense. Glad you got it, and thanks for the compliment.

Janet, as I read this at lunch time (a nice healty bowl of soup) you set this one nicely..... the fun thing is people really hate to diet

THIS IS SO GOOD!! I flagged it.

2004 - No credit, no money, no problem.

2008 - No credit, no money, no mortgage.

I cannot wait till my first crawfish boil. Great blog. Its odd because I never got to one of those places. I guess being behind the times are not so bad in New Orleans after all. I cannot wait til social security goes down and that will make this tlook tame by comparison.

Great analogy!

MAR

2008

Janet, loved the analogy. Perfect example of why fast food is bad for you.

MAR

2008

Janet - What a terrific article. This one's going to stay around for awhile!

What a clever post. Nicely done.

Well this is very clever -- however, the mortgage companies were sort of like the doctors --they saw the x-rays (credit,reserves etc.) but didn't give the proper warnings to the patient -- and let them eat "lies". Others, just decided to say nothing so they could simply collect those fees -

MAR

2008

Janet: Great analogy and great post but the sage continues only in the form of government subsidizes -FHA and those are direct government (taxpayer) bailouts. NO BAD FICO LEFT BEHIND is their name, no reserves required. It's just the latest scam, once we are under their umbrella we'll know the worst sub prime mortgage was sensible. I am concerned with the government taking over housing period. They can't even build a fence. Patti - California

Janet - that was so clever and witty - the perfect analogy. I'll take a McMansion on the side, please.

What an entertaining way to get across a very important truth. That's definitely how we got into this mess.

MAR

2008

Excellent article for the contest Janet!!!

I loved this article. I'm guilty of pointing my finger at the industry players as the cause for most of the dabacle we're in...but the consumer is just as guilty. "Gluttons for punishment".

I am SO GLAD you entered this!! Ditto Jason!

Janet...this is a great piece of writing. What a great addition to the creative writing challenge. Now I gotta get back on the treadmill...

I absolutely LOVE this blog! I really can not think of a better analogy. I love it! Gave a great weekend Janet!

MAR

2008

Janet .. Great analogy... Downside of this is many who got a McMortgage can no longer pay for their McMansion.

I thing the term McMansion inspired this post (subconsciously),Sandra

MAR

2008

Janet... extremely creative.... I loved the analogy. And yes, so many lie or mislead out there. Just one thing though.... even jumbo mortgages can be done, on the FHA side of things... and they still aren't as hard as so many think. Yes, many lenders won't go below a 660 or 620... but I can go down to a 580 on a FHA jumbo mortgage and still get them done in less than a month. I only bring this up because even though the menu as you mentioned has fewer items on them, which is true.... the full doc, FHA is still easy...or better yet, not as hard as so many make it out to be. It just comes down to the loan officer that makes them more difficult.

But seriously... this was extremely creative.... great job.

MAR

2008

So funny, Janet. Very interesting that the term "Fast and Easy" came up since Countrywide is soon doing away with that particular product. We now call them "Slow and Hard". I do agree with Jeff B. about FHA though. It is not as hard as many make it out to be.

Jeff: Did I mention that you are my new hero? You and Chaz in Atlanta. That I am going back and reading all of your FHA posts? Remember when I first joined AR I told you FHA was extinct in our high dollar area? What a difference you year makes...now every loan officer in the Bay Area is trying to figure it out with mixed results.

I feel so fortunate to already know someone with such expertise. FYI: right now we do not have a lender that will go down to 580 even though I know FHA will. I am not sure why, but those are the guidelines imposed by the lenders. We hope once the jumbos are actually being sold things will loosen up a bit.

We also have the issue that we are all 1099ed which FHA will not allow? So we are working through some kinks, and I am one of the lucky ones. There is such a wealth of info in the Rain! Thank you so much for your comment, but mostly for all of your amazing contributions to our community. You rock.

Slow and hard. Oh my gosh, I'm not touching that one.

Looking forward to the day I don't think it is hard. Of course, everything seems "hard" compared to the good old days. Did I just say good old days?

I love the title! Great post.

Bear STearns had a product that was stated/stated with a 620 mid fico. I remember they pulled it after 1 week.

Very good. You are truly the master of analogy. Well deserved Gold Star.

What a great presentation - it's one of those things I read and say, "Why didn't I think of that?" Congrats! This should be a featured post - oops, I guess I was checking out the Featured Posts. Perfect!

Thank god we are going back to a normal market! Great blog.

That was McBrilliant!

Thanks for the post. There certainly is pain to be shared by nearly everyone in the industry in the short term as the financial markets correct themselves, but clearly it's to the benefit of all in the long term. The "fast food" mortgage products likely would have ended with a thud rather than a crash had our friends on wall street not extended the party a little too long with their subprime backed CDO's, but at least we are entering a period of correction that can set us on a healthier track of sustainability.

Thanks again for the clever and creative post....

All I can say is bravo and excellent!

Great post! Love the analogy.

Janet - I am one of those people that hate dieting and I love the quarter pounder and cheese and no one has better fries than McDonalds. Anyway, I thought your play with words was great. In your neck of the woods it is going to take a little longer to sort things out. But just for your info, there are still a few lenders doing Full doc stuff down to 550. I just closed a 564 and a 569. The LTV's were 80% and 70% and the rates were nasty but they are still doable.

My analysis is that this immediate crisis we are in is a knee jerk reaction and we will get back making loans work a lot easier. We have now swung to the far other extreme and it will be equally as bad for our economy and for the good honest, hard working people that actually do need to do something about their mortgage. We are going to have to bring back the stated loan or they are going to have to allow deductions to be added back into Line 37 of the tax returns. All the self employed people out there are in a world of hurt right now and now the rules are making it so that they can't get loans at all. Since the small business man is the life flow of this country you could say this knee jerk reaction is kicking america straight in the heart.

I have 5 California investors that have lived off of the stated programs made available to them. They have done well and prospered in their real estate businesses because of it. This is the way they earn a living. Now that the stated stuff is gone they can't get financing. each one of these investors have been in business for himself for at least 8 years and they all have super high credit scores. None of them has ever paid any bill late much less a mortgage but now they can't even do business. So something is going to have to give.

McDonalds is not bad but you just don't want it everyday.

I completely agree with John above.

What a great easy read, love the pictures you've got accompanying the post!

Janet...you deserved to win the challenge. I'm glad that you've been recognized for another excellent post...one that will stick in my head for life. That's good writing!

Oh my Janet... that was a good title.... Seems to be the going thing recently...

I'm going to forward this to some friends (non AR friends that is lol) who could really use this analogy. THANKS!

McMortgage. that's funny! I recently saw a video on youtube called the Mcdonald's rap. It's a bunch of kids going through a drive through singing a rap into the machine. My 12 year old was showed it to me. I think it's funny. I can imagine someone rapping thier way through a mortgage application. Imagine this...

"gimme a jumbo, I need a really large numbo,

no money down fo' my new home in town.

wrap in da closing costs, no need to call my boss.

6 month arm, no need for alarm

'cause I aint gonna pay past next Saturday!"

Great analgy. I think once we get out of the current problems with the real estate market we will be healthier if we stay away from some of bizarre loan programs we used to have

Current Mortgage Rates Widget for your Website

Love your analagy! What great writing skills. Can't wait to read your other blogs!

Very clever. But, alas, memories are short...people build where there were fires or floods or landslides...where some said noone would build again. McMortgages will be back...it's just a matter of how long.

APR

2008

Hi Janet, This is a great analogy and that is one ugly burger. LOL. Seriously, can I print this to share with clients? Giving you credit of course. Thanks.

Very creative post and clever graphics -- thanks for posting and sharing. All the best.

Excellent!

Vey good and really hit the mark and as some fast food vendors have dissappeared from the scene so have lots of mortgage brokers gone the same way! Thanks for sharing.

Bill Herold

Interesting comparison. And so true!

Yep you have it all here. The new mortgage process is healthier for us as a nation. Now we need to work On McCredit Card and McBankruptcy. We need to slow the spending/ large balances on credit cards.

Move over McMortgage, there's a new sherrif in town....McForeclosure. Great post!

This should be in print EVERYWHERE and on the television news! Everyone would be so much better off and better educated. Thank you

Janet --- This is a wonderful post. . I am subscribing to your blog, keep it coming. . .

Janet,

Caught this one my way out. What a terrific post! It takes discipline to eat off the "dollar menu" and only spend a buck.

Janet, what a great post. So true and it sure does make it's point. Definitely hope this gets passed around to the buying public.

CONGRATULATIONS JANET!!! This is a fantastic post and I am thrilled that you won the Mortgage Creative Writing Challenge! You absolutely deserved the recognition.

I love the comments here - This post needs to be read by everyone.

May I have permission to link to this article on my website, and print it out for my office and my clients?

Thanks again for participating and for your consistently excellent contributions!

Great spin on the mortgage crisis! I think MOST people benefited from these "McMortgage" loans. What I mean to say is they would have qualified for a loan, anyway...and they simply were able to get some better terms or put less money down.

A small percentage (who arguably should never have received those "special terms" loans) either took advantage of the system or the system took advantage of them. I think it's sad...and try to take it as an opportunity to create more value as a Realtor...as a trusted advisor.

Janet!!! awesome, how many mcdonalds do you think will shut?

Janet, great post! can we get this on Good Morning America?

Jeff Lund

Five Star Real Estate

Investment Propety Specialist

Okay, Stacy, the McMortgage Rap was just hilarious. You absolutley MUST add a few more verses and some music and get behind a video camera. If you (like me) are too shy to do the McMortgage Rap, by all means call Brad Andersohn, the Ham of the Year.

He is armed and dangerous with his flip camera, and looking for members to do demo videos.

Jeff: As a follow up to the Good Morning America post...that post just won't die. We had other newscasters begging to do interviews with "Jake", but he suddenly became camera shy, and decided he did not want to be a celebrity known for not being able to make his house payment. Can't say that I blame him, either.

But he definately is a victim of the McMortgage Era.

Janet - Well, if Brady is the Mortgage King....you are the Mortgage Queen. Congrats my dear and thank you so much for contributing, let alone knocking our freaking socks off:-)

This is for John Cookman: Thank you so much for your insight and comment. When you got to the last part about stated income, I wanted to stand up and cheer. I have a whole data base FULL of self employed borrowers who are 50 something with high 700 scores, and plenty of assets. Because they write off everything under the sun on their tax returns, because they need loans beyond those that will be purchased by Freddie/Fannie, they cannot get loans.

I feel just like you do. The system is penalizing those that are providing jobs, have paid all their bills on time for many years, and have disposable income to keep the economy churning.

I hate that stated income turned into a side of lies, when it really was supposed to be a baked potato. Not a salad, but still healthy and low fat. Now that is off the menu and that is really stupid.

Mike : 620 Stated/stated...how greasy/greedy is THAT?

John V.: Not certain that McMortgages will ever be back in the same way they were before. But living though this era a healthy eating is certainly taking its toll. It is hard to cleanse they system and you hope you never have to do it again.

Russ: McCredit card, in my opinion, is why we are not a nation of savers. Having that plastic in your back pocket just allows the overwhelming temptation (fro most people) to pile on debt. 100% financing fueled the housing boom in a way that most people do not even realize.

We, as a nation, just do not save. You are correct to say this should be a part of the healing process.

Jennifer: Of course you may use this post if you like. Thank you again for everything you and Jason did to encourage everyone to up their game, and prove that mortgage writing can be fun. Thank you to all of the judges who contributed their time. I now need to pay it forward and will definately volunteer to help with our next contest.

Ja-Sar: You are pretty good at writing and winning contests yourself. I was frankly encouranged to enter when I realized you could not. LOL Cakewalk Mortgage forever.

Great analogy Janet. Unfortunately both the fries and lies will sneak up on you later. Thanks to you I'll never look at McDonald's the same.

Doreen: I know, isn't that burger just disgusting? That is what is so funny...usually burgers look so good in pictures, but this one just looks like a big ugly hunk of dead cow. I thought it was so appropriate... you are the first one to mention this.

Ugly, intentionally!

To all those community members who have sent congratulations:

A very big and warm THANK YOU. It is an amazing privilege to be able to express ourselves here in the Rain, and learn what others in our industry are thinking, and benefit from this. Please NEVER take this for granted, and never hesitate to share with us by expressing yourself.

Truely, I am humbled to be surrounded by so many brilliant minds, and wonderful writers. It does mean the world to me that you enjoyed this post, and related to its message.

Thank you, ActiveRain, for encouraging us to think, to share, and to become better real estate professionals.

To the judges, to all who participated, and to Jennifer and Jason: My hat is off to you. We are rockin' in the Rain.

Great post Janet. One wonder what the next set of problems will be.

Congratulations on this post. Extremely well done and well deserved! And, your point is spot on.

those who ate the mcfood in the car may have noticed that it left a distinctive smell in the car. the mortgages have left a lingering odor too.

Janet, this is such a great post and even though it is more difficult for buyers to get financed nowadays, I'm glad mortgages are of the healthier type now. Very well said!!

It definitely isn't healthy for the waist line or the pocket book. FAST doesn't equal Better. It just mean it can be done faster (and most likely sloppier)

True to form. Some have gotten "fat" over this very thing. But the uninformed consumer is the one who has o pay.

What an eye-catching title! I loved your post....very clever. I agree wholeheartedly with you....

Janet,

Very creative analogy. I loved reading this. I am subscribing to your blog.

Sadly the McMansion analogy is so true. It is the day and age of instant gratification in which that some people just have a hard time saving for a rainy day. Some of us just have to have (whatever it is) NOW!

Very clever. I think that it will take awhile for people to realize that the drive thru is closed.

great analogies. I love it

Those who thought this scheme could sustain are three fries short of a Happy Meal...

Brilliant analogy! And just simple enough most of us 'get it'...;) I propose a brochure for Congress to study while they ponder reforms for the system...

Janet,

I'm glad you found my rap amusing. In fact, I created a blog for it, encouring others to help write the rest of the lyrics. One person has tried so far. I linked to your blog from mine. If I get enough interest, I will perform an actual song and video out of it, just as you requested. I would love contributions from other members. My blog on this topic is The Subprime Mortgage Rap and can be found at http://activerain.com/blogsview/448591/The-Subprime-Mortgage-Rap

Stacey

Hey all you creative types out there! Stacey has volunteered to perform the Supprime Mortgage Rap. I love it! All you have to do is write the rest of it. I laughed out loud at the first verse. Go check out the blog in the comment above. I am volunteering Brad Andersohn for this. He has already written a very funny song about the miseries of being in the real estate business. Brad?

This has to be one of the most brilliant analogies I have seen in a long time!

Unbelievable post... too bad its true for my client. It's the first time a client of mine has been denied for any kind of mortgage. I will have to look at this as a positive change for the economy, but devastating for my client.

Great analogy Janet. We are all surely paying a price for past gluttony.

APR

2008

Excellent post Janet !!

very solid

APR

2008

After 86 comments its hard to know what to Add! Nevertheless........how creative and entertaining........very interesting 'take out' on the Mcmortgages....! :-)

The drive thru days are definitely gone. Very good article...

APR

2008

Great post...did you get permission to post that gut?

APR

2008

Edward: The name and face were withheld to protect the innocent.

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