News Media At It Again With More Scare Tactics!!!!!

Ray, you make a good point especially if those two year ARM's were 100% Loans and the market was slow during one or both of those years, there might not be enough equity to be able to refinance also.  But those guide lines have not changed or tighten up, so even there the News media would be creating a scare tactic.

Dena, some Lenders might be turning down people because they are not putting them through the right programs or even trying to put them through those programs. 

Ines, you are absolutely right.  If we do not correct the mis-information that the Media is spreading then people will take it as fact.

Linda, thank you.  I wish I could keep myself from watching it also, but I am not as disciplined as you.

Mikey, if you go back and read my comment to Jeff you would see that he only had the second job for six months, and I can not use income from a second job unless the borrower has had the job for at least one year  in this loan program.

As far as the other undocumented income and letting the underwriter know about his character, that has nothing to do with his ability to pay, and that is what the underwriting decision is based on.  There is no place on the 1003 to give on opinion on a borrowers moral charter, in fact that you probably be grounds for a huge law suit if a loan was ever turned down for moral reasons.  And unless documentation can be gotten to show that he is doing something illegal we can't do anything but approve the loan if he qualifies based on the income that he can document.

Also I would disagree that Subprime loans are designed to fail. Suprime Loans have never accounted for much of my business, I don't like them and I am usually successful in getting the Borrower into a conventional or government loan program.  But the very few that I have done, the Borrowers that did what I told them and cleaned up their credit in the two year fixed period, were all able to Refinance.  Those that kept on doing what they had done in the past could not.  Once given the knowledge of what they need to do, it is their responsibility to do it and no one else’s. 

Mikey, I am not a Broker, we originate, underwrite, and close all of our loans in house except for Subprime, and service many of the Loans we close.  So that being said, loans are based on credit history and ability to pay, it is a financial decision, we do not make moral judgments on approve loans based on peoples character.  If Automated Underwriting gives an Approved/Eligible, the only thing that underwriting will do is verify the information given for accuracy, it all checks out the loan is approved.  Loan approvals are based on facts knows not character assumptions.

Second, the average loan these day, regardless of the loan product stays on the books for an average of 5 years, that is an industry wide average.

Fail to me means default, no one designs loan programs that the objective is for them to default.

Jay, isn't it amazing that they only want to hear and report the negative, and the more negative it is the better they like it.

Thank you for sharing that experience with us Jay. 

Ann, you are soooooo right.  There are probably more that were able to refi out of Subprime than those that are stuck in Subprime.

TLW, we know that but unfortunately much of the public doesn’t, I guess we will have to straighten them out :)

Alex, I guess I would rather run the risk of getting depressed and know what the Media is up to than not.  I guess I am just a gluten for punishment.