Mortgage Crisis?

Real Estate Agent with Long & Foster Real Estate, Inc

I would love to hear from lenders in the network who are willing to talk about the current mortgage crisis.  I know when the market was HOT, subprime lenders were fat and happy handing out loans to barely qualified, and sometimes unqualified clients.  Real estate agents participated in this as well, this is not an attempt to blame lenders.  For the most part, Lenders (and real estate agents) are honest and ethical people trying to make a living.  But we all can admit, there are/were "slugs" in the business who prayed on people and their desire for the american dream.

People are in trouble now.  People are in mortgages that are resetting to points where they are stuggling to pay their mortgage, some who are one paycheck away from default and some who are already in default and will be losing their home and their dream.

We all know that this affects all of us.  The market is slow, people are afraid and we aren't selling as much as we would like.  I think we can all agree that foreclosures are not a good thing.  Banks and lenders don't really want to own these homes.  They, hopefully, would be more interested in finding ways to help these people keep their homes.

How about some creative ideas for restructuring loans that would help people keep their homes.  Yes, there will be risk and undoubtedly some will still default.  But look at the bigger picture, most will continue owning (and paying for) their homes.  This seems to me to be better for the economy overall than massive numbers of foreclosures that will drag our economy down further and further, eventually affecting all segments of society.

Am I being naive?  I hope not!  Can we think ouside the box and find ways to fix this?


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Karl Kruger
North State Financial, Inc. - Brentwood, CA
Tom,  the light is at the end of the tunnel.  In about two months, we will start seeing the new programs lenders are coming up with right now.  Investors always knee jerk a pull back on any programs the Feds or Wall Street dont like.  The same investors will see their wallets slim down because of the pull back, then they come up with the new programs.   Look what happened a year ago with the tightening of Int Only loans 2/28s, etc.   The lenders had to figure a way to keep the payments low, but satisfy the investors and wall street with lower risk on the loans.   They came up with the 40 and 50 year term loans.  Fully amortized, but the payments stayed about the same as the riskier INt Only loans.     We will see solutions soon, but its a tough time right now for sure.  I tell those clients,  hang on and keep the payments up to date on your mortgage.  We have solutions for you in the pipeline. 
Apr 21, 2007 06:05 AM #1
Tom Brannigan
Long & Foster Real Estate, Inc - Wheaton, MD
Thanks for the comment Karl.  I look forward to hearing more about the solutions you see coming.  There is so many negative comments and press these days, it would great to be able to publish positive comments and feelings.
Apr 21, 2007 06:37 AM #2
R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

I think that before a loan is restructured that the lender should requalify the people as they should have been qualified when they got the mortgage.  Their current job and income situation with the credit report that they had then.  If they qualify for a REAL mortgage, then give it to them... let them start over with real terms that are doable.  If they don't qualify, foreclose on them and learn from your mistakes...both the lender and the borrower.

R.B. "Bob" Mitchell

ValueList Real Estate Services, inc. 

Apr 21, 2007 06:51 AM #3
Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs
We have seen very few foreclosures form subprime lending in this area. I have not heard about one yet in the segment of the market that I cover. I hear about it from the web but from no agents here.
Apr 21, 2007 11:55 AM #4
John MacArthur
Century 21 Redwood - Washington, DC
Licensed Maryland/DC Realtor, Metro DC Homes

Well, I have read the comments. What planet are you folks living on? Since April, the lending industry has begun unraveling. It is now August and the only new product is the result of exclusing old products. If you want a non-conforming will have to be qualified for about 2 points higher than the rate you will pay.

That wasn't any light at the end of the tunnel. That was a damn freight train full of full closures that has steamrolled over all the brokers that had their head in the sand when margins were called.


Aug 06, 2007 10:11 AM #5
Vanessa Plante-McDonald, MBA, REALTOR® - Cash Rebate to ALL My Buyers!
Bethel Equities, LLC - Laurel, MD
Let's hope we see some light soon. This picture looks pretty grim folks!
Aug 15, 2007 01:32 PM #6
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