I am worried about home buyers overextending themselves over the last few years

By
Mortgage and Lending with Charter One Bank
I have seen many industry changes over the past 30 days. This would be in the subprime market . People with less than perfect credit. If they purchased a home 2 - 3 years ago, they most likely were on an adjustable mortgage that is about to adjust. The adjustment will be quite high where they may not be able to afford the new payment. With many new tighter underwriting guidelines , they may not qualify for a refinance. Therefore they won't be able to make the mortgage payment that could be 5% higher or more than they paid for the first few years. I smell foreclosures, and we are already seeing a record number of them. I personally feel because of these adjustments , times will get worse. Many lenders have closed their doors over the past 2 months because of foreclosures. I predict that the almighty goverment steps in to help our homebuyers and (more important than the little homebuyer)..the lenders to keep them from going under. I am thinking a goverment refi program to lower payments for the homebuyer...maybe a longer term amortization or interest only position on their current loan without refinancing so buyers don't lose their dream homes , and subprime lenders stay in business.     Tony Felbab  

Comments (6)

Laurie Mindnich
Centennial, CO
Tony- I don't recall any particular assistance from the government in previous poor markets- it's usually the owner and the bank.  Keeping in mind that this is cyclical, by the time the subprime is back and robust, the 10 years needed will have passed, and people that are foreclosing now will be able to buy again...and again...
Apr 26, 2007 12:06 AM
Anthony Felbab
Charter One Bank - Geneva, IL
Think I was on track....whats your thoughts today Laurie...just curious....it will come back...basically the secondary market is asking for a higher yield on no docs etc.   middle guys can't afford the loss and are going down...I had friends at ABC  get back to me ...Tony
Aug 03, 2007 05:17 PM
Helene McElmurray
Trademark Financial Group - Valencia, CA
CMPS

I actualy have a Home Builder account and the owner happens to be the President of the National Home Builder's Association.  He has spent a great deal of time back East with the "powers that be" (including the President) addressing exactly what might be done to prevent exactly what you allude to Tony.  While this does not guarantee that the government will act, it does indicate an awareness of the problem and potential repercussions.

Helene

Aug 03, 2007 05:59 PM
Gary Miljour
American Financial Network, Inc. NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Even though I like your uptopian thoughts, I sincerely do not think the government will step in and fix the problem.  I see rates maybe being cut after the market is already passed the point of no return.  That is all I see.  The only government intervention will be more regulations on our industry.  I will RANT a little and say, when is CONSUMERS going to take some responsibilty for their own actions. 

Aug 03, 2007 07:33 PM
Anthony Felbab
Charter One Bank - Geneva, IL

looks like Anthony was correct, before it even happened on the downfall....it saddens me that the other day I was locking someone in with a approx 70% LTV where I had a 725 credit score...at lock stage the lender  (huge one ) told me it would cost an extra 1/2 point...obviously my question was why ?????   my credit report didn't matter...theres showed a 705 middle score...which means , extra 1/2 point.....this is a past customer....who do you think ate that 1/2 point.....Anthony...heck whats $1332 out of my pocket!!,,,, I have learned....no one locks in until they are clear to close....don't like it .....and some other lender tells you different...there rookies....not even sure who this message is going to....hopefully...Gary, Helene, and the lady from Options Realty that didn't leave her name....someone get back to me and at least let me know this got out there...thanks...have a great Holiday...Tony 

May 23, 2009 06:21 PM
Anthony Felbab
Charter One Bank - Geneva, IL

It's been 2 years since you commented on my thoughts before the mortgage industry fell apart.  I know I was right.  I don't have your name but it looks like you work for Charter One Bank.  I just joined them 2 months ago.  My first 10 years in the biz was with a bank, then I woke up to the money on the broker side and spent 10 years there.  Back to the Bank envirement !  Bo of A shut down wholesale last week.  I remember having at least 15 lenders to send loans to.  Now it looks like the brokers are down to about three with constant buy back loan issues.  Thats why I went back to the suit and tie!!  Hope your doing well! Anthony

Oct 14, 2011 11:50 AM