This is an emotional blog. I am suppressing my anger so don't expect any well thought out logic here.
For several years the banks offered the NINA loans (No income no asset) and did so based on credit scores only. They offered these loans at 100%. I always criticized them for making these loans because back in the day when I did some foreclosure work for a large finance company the average cost of a foreclosure then was 13%. So I felt that the banks should not be lending more than 85% on the stated loans and that should have been by considering the entire loan package.
Now the banks are taking a beating and still are brain dead. They are swinging much to far; there is too much over correction. Now we have clients who have $50,000 in the bank, high credit scores, but can't prove income to the banks satisfaction - therefore they pass on the loans. A restaurant owner may not show a substantial front page tax bottom line. Many self employed people pass expenses through and don't show good numbers but for years they have paid all debt and have established a good business.
Here is what the banks have forgotten; Residential real estate and mortgage loans is still a PEOPLE business. Real Estate transactions are done one at a time. Banks should look at loans the same way. One at a time and get back to when we used to talk to underwriters and banks tried to be helpful.
The media has been on my frustration list for some time, now the banks have joined the list.
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