Comments on: Freddie Mac steps in to the Alt-A void http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/ #1 Free Home Loan Modification & Debt Relief Help For US Home Owners - Truths, Facts & News About the Mortgage Industry Sat, 07 Nov 2009 02:53:18 -0700 http://wordpress.org/?v=2.8.3 hourly 1 By: Morgan Brown http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2598 Morgan Brown Fri, 17 Aug 2007 05:05:23 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2598 S Hallman - I have to agree with you. There is culpability across the board. Whether the braniacs that created these loan products are able to create ones that back us out of this mess is yet to be seen; but I do know that brokers can't create new loan products or extend credit - regardless of how smart they are. S Hallman – I have to agree with you. There is culpability across the board. Whether the braniacs that created these loan products are able to create ones that back us out of this mess is yet to be seen; but I do know that brokers can’t create new loan products or extend credit – regardless of how smart they are.

]]> By: S Hallman http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2406 S Hallman Thu, 16 Aug 2007 17:03:44 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2406 I just love all this monday morning quarterbacking - why weren't all you naysayers about these products screaming and telling people not to do them when you could have prevented their heartache? Oh, that's right, you had no idea home prices would go down, supply and demand would reverse and interest rates would creep up. Duh! we all know why this happened with this perfect hindsight - quit playing the blame game (there's plenty to go around) spend your energy coming up with a brilliant way out of this mess since you are so smart I just love all this monday morning quarterbacking – why weren’t all you naysayers about these products screaming and telling people not to do them when you could have prevented their heartache? Oh, that’s right, you had no idea home prices would go down, supply and demand would reverse and interest rates would creep up. Duh! we all know why this happened with this perfect hindsight – quit playing the blame game (there’s plenty to go around) spend your energy coming up with a brilliant way out of this mess since you are so smart

]]> By: Brian Brady http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2399 Brian Brady Thu, 16 Aug 2007 08:26:18 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2399 Morgan, There is nothing wrong with Alt-A financing...if the LTVs are cut and they're only offered for primary homes. We never had problems with Alt A defaults in 2002 and before; that's because they required a 20% down payment. Freddie is wise to step in and pick u the slack. We need liquidity, liquidity with sound underwriting guidelines, but liquidity nonetheless. Morgan,

There is nothing wrong with Alt-A financing…if the LTVs are cut and they’re only offered for primary homes.

We never had problems with Alt A defaults in 2002 and before; that’s because they required a 20% down payment. Freddie is wise to step in and pick u the slack. We need liquidity, liquidity with sound underwriting guidelines, but liquidity nonetheless.

]]> By: NevadaBroker http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2396 NevadaBroker Thu, 16 Aug 2007 04:26:44 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2396 jack1 I was making a joke based upon your punctuation in writing, not the point you were making. Look up Boomhower from 'king of the hill', then read your post. My post was in response to all of the posts including yours. Nevada is irrelevant to the problem, that's just pointing fingers which is the joke about this whole thing. That's why the lawyers in this country thrive, because there's a bunch of fools that gather together and sue eachother instead of the fixing the problem, but that's another issue in itself. The brokers are a part of the problem equally as much as the borrowers. And then you can say it's the Feds fault for not cutting us off earlier, and the finger pointing continues. If you really want to point fingers, then look to Wall Street where the investors started the liquidity scare by forcing the lenders to buyback mortgages to hedge against future foreclosure losses (of which they shorted for a profit knowing stocks would fall). If you are following the stock market, you know there are investors making a killing on this right now by playing the downward movement of the markets. There are hedge funds created to capitalize on the falling real estate market, they are up in some cases over 250% this year! Being in the mortgage business, I have seen first hand that there were very sophisticated investors "making" the market move to their favor, this includes the home builders. Their only concern was profit, not the well being of the economy. Understand that when these mortgage companies are closing down, the only losers are the employees and investors that hold their stock (if they're public companies). The execs are not coming out of this poor. Most home owners are not coming out of this poor either. For all the scummy loan officers that you guys refer to being kicked out of the industry, get a clue, they will come right back the minute the market turns around and pays again. If the market doesn't pay again, then you the borrower still lose because you won't have the ability to get good loans easily when you need them. You can stand in line at the 4 remaining banks and bend over and take whatever they choose to shove up your.... jack1 I was making a joke based upon your punctuation in writing, not the point you were making. Look up Boomhower from ‘king of the hill’, then read your post. My post was in response to all of the posts including yours. Nevada is irrelevant to the problem, that’s just pointing fingers which is the joke about this whole thing. That’s why the lawyers in this country thrive, because there’s a bunch of fools that gather together and sue eachother instead of the fixing the problem, but that’s another issue in itself. The brokers are a part of the problem equally as much as the borrowers. And then you can say it’s the Feds fault for not cutting us off earlier, and the finger pointing continues. If you really want to point fingers, then look to Wall Street where the investors started the liquidity scare by forcing the lenders to buyback mortgages to hedge against future foreclosure losses (of which they shorted for a profit knowing stocks would fall). If you are following the stock market, you know there are investors making a killing on this right now by playing the downward movement of the markets. There are hedge funds created to capitalize on the falling real estate market, they are up in some cases over 250% this year! Being in the mortgage business, I have seen first hand that there were very sophisticated investors “making” the market move to their favor, this includes the home builders. Their only concern was profit, not the well being of the economy. Understand that when these mortgage companies are closing down, the only losers are the employees and investors that hold their stock (if they’re public companies). The execs are not coming out of this poor. Most home owners are not coming out of this poor either. For all the scummy loan officers that you guys refer to being kicked out of the industry, get a clue, they will come right back the minute the market turns around and pays again. If the market doesn’t pay again, then you the borrower still lose because you won’t have the ability to get good loans easily when you need them. You can stand in line at the 4 remaining banks and bend over and take whatever they choose to shove up your….

]]> By: jack1 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2387 jack1 Wed, 15 Aug 2007 17:07:25 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2387 nevada broker i never said the fed is going to bail us out if they doit it will be to cover up the mess we are in now if it wasnt for places like nevada we wouldnt have this problem thats right broker in nevada will be broker good luck nevada broker i never said the fed is going to bail us out if they doit it will be to cover up the mess we are in now if it wasnt for places like nevada we wouldnt have this problem thats right broker in nevada will be broker good luck

]]> By: Housing Wire - » Freddie to the Rescue: Alt-A Purchase Commitment Means Additional Liquidity http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2386 Housing Wire - » Freddie to the Rescue: Alt-A Purchase Commitment Means Additional Liquidity Wed, 15 Aug 2007 17:04:12 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2386 [...] seen some commentary characterizing this move as a bail out where lenders can unload their high-risk junk — and I don’t think that’s [...] [...] seen some commentary characterizing this move as a bail out where lenders can unload their high-risk junk — and I don’t think that’s [...]

]]> By: Jmolina http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2384 Jmolina Wed, 15 Aug 2007 16:35:36 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2384 Ok? enough! What needs happen is simple. First of all, for all the maturing 2-28 and 3-27s loan programs out there. Your in luck. If you can convince your bank to grant you an extension of 3 to 5 years, at the same rate you qualified. This can fix the problem right now which is what the industry needs. What to do: call your lender and ask for a ?note modification? hopefully they?ll be willing. There are lenders that are calling their past clients and offering them an extension of their rate before it changes (6 months prior to adjusting) until the market heals to avoid any disruption of the lenders investment and the borrower?s home life. Sounds like a win-win to me.. It breaks my heart to see these nice people get driven out their homes. The worse thing is that the majority of the sub prime borrowers didn?t understand their loans. They based all of their trust in the loan officer who only was thinking more of the white sandy beaches then the customer?s best interest. Soon.. No more unscrupulous brown collar wannabe money hungry mortgage lenders. All they can think of is making the big bucks. Well the only good about this market is that it?s cleaning the industries colon of these monies mongers. It pays to do the right thing if you?re not passionate about helping your customers get out of the service industry because honesty feels right and yes the nice guy does finish first. (On this one..). Ok? enough! What needs happen is simple. First of all, for all the maturing 2-28 and 3-27s loan programs out there. Your in luck. If you can convince your bank to grant you an extension of 3 to 5 years, at the same rate you qualified. This can fix the problem right now which is what the industry needs.

What to do: call your lender and ask for a ?note modification? hopefully they?ll be willing. There are lenders that are calling their past clients and offering them an extension of their rate before it changes (6 months prior to adjusting) until the market heals to avoid any disruption of the lenders investment and the borrower?s home life. Sounds like a win-win to me..

It breaks my heart to see these nice people get driven out their homes. The worse thing is that the majority of the sub prime borrowers didn?t understand their loans. They based all of their trust in the loan officer who only was thinking more of the white sandy beaches then the customer?s best interest. Soon.. No more unscrupulous brown collar wannabe money hungry mortgage lenders. All they can think of is making the big bucks. Well the only good about this market is that it?s cleaning the industries colon of these monies mongers. It pays to do the right thing if you?re not passionate about helping your customers get out of the service industry because honesty feels right and yes the nice guy does finish first. (On this one..).

]]> By: Common Sense http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2381 Common Sense Wed, 15 Aug 2007 14:07:48 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2381 Nick- You are the one that is foolish. Yes, 3 years ago the Libor was at 1.9% (your number, I'm not going to bother to check it, but it sounds about right). However, you're disingenuously citing the low end of the average rate "bell". The long term averages on even the Federal Fund Rates is something like 8% on a historical basis. Do you realize that in 1982 the Federal Fund rate was at 18% for a short time? The point is that, no one can predict markets, Libor rates, or FF rates. We could have another Sept. 11 tomorrow and rates would with out a doubt plummet to put a lot more liquidity in the system. However, with that in mind, nearly everyone (please note- nearly) that signed up for an ARM in the last couple of years was an idiot. They are appropriate for some people in some circumstances, however there is still a large part of speculation in those products as no one can predict the future. The reason that there is not a product for your "clients" is that there is too much risk in loaning those people money. The interest rate is what those people pay for the privilege of borrowing money. Investors (those loaning the money) need to be compensated for the risks they are tacking- as in the risk of not being paid back in a timely fashion or at all. Those risks are secured with the underlying asset (the home); however many of the bag holders (investors) are finding that the assets are not worth nearly what they were told they were worth. Believe me, if it was your money on the line, you would demand more than 3 or 4% for the risk involved in lending money. Why take a bad risk at 3% when you could be "riskless" at the Federal Fund rate (don't get me started about the falling $)? It's not really your fault (per se) that you don't understand or even care about that- systems (mortgage / bond market) get what they reward. I be you are rewarded for loans closed; you're probably rewarded more for loans closed at larger spreads- spread being both the rate and the products you are selling. A real quick way to fix this would be to base your compensation on loan performance. Enough for now. You and your ilk have screwed up so badly at this point you're about to be either legislated or prosecuted out of business. I sincerely hope that you were not knowingly involved in mortgage fraud of any kind over the last few years (fake docs, liar loans, pressuring appraisers, etc.). This is going to be ugly and huge. regards, Common Sense Nick-

You are the one that is foolish. Yes, 3 years ago the Libor was at 1.9% (your number, I’m not going to bother to check it, but it sounds about right). However, you’re disingenuously citing the low end of the average rate “bell”. The long term averages on even the Federal Fund Rates is something like 8% on a historical basis. Do you realize that in 1982 the Federal Fund rate was at 18% for a short time?

The point is that, no one can predict markets, Libor rates, or FF rates. We could have another Sept. 11 tomorrow and rates would with out a doubt plummet to put a lot more liquidity in the system. However, with that in mind, nearly everyone (please note- nearly) that signed up for an ARM in the last couple of years was an idiot. They are appropriate for some people in some circumstances, however there is still a large part of speculation in those products as no one can predict the future.

The reason that there is not a product for your “clients” is that there is too much risk in loaning those people money. The interest rate is what those people pay for the privilege of borrowing money. Investors (those loaning the money) need to be compensated for the risks they are tacking- as in the risk of not being paid back in a timely fashion or at all. Those risks are secured with the underlying asset (the home); however many of the bag holders (investors) are finding that the assets are not worth nearly what they were told they were worth.

Believe me, if it was your money on the line, you would demand more than 3 or 4% for the risk involved in lending money. Why take a bad risk at 3% when you could be “riskless” at the Federal Fund rate (don’t get me started about the falling $)?

It’s not really your fault (per se) that you don’t understand or even care about that- systems (mortgage / bond market) get what they reward. I be you are rewarded for loans closed; you’re probably rewarded more for loans closed at larger spreads- spread being both the rate and the products you are selling. A real quick way to fix this would be to base your compensation on loan performance.

Enough for now. You and your ilk have screwed up so badly at this point you’re about to be either legislated or prosecuted out of business. I sincerely hope that you were not knowingly involved in mortgage fraud of any kind over the last few years (fake docs, liar loans, pressuring appraisers, etc.). This is going to be ugly and huge.

regards,

Common Sense

]]> By: NevadaBroker http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2377 NevadaBroker Wed, 15 Aug 2007 07:19:37 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2377 Jack1 is your real name Boomhower? The Federal Reserve and Government are always lagging behind the economy and are not going to "bail" us out. It's too late for that, the snowball that has started the avalanche can't be stopped. If you understand the basics of economics, you should have known that in 2004 when the boom was at it's peak, borrowers abandoned the "expensive" 30 year fixed loans and took out a disproportionate amount of Adjustable rate mortgages to buy more home than they could afford (their choice). In addition, record numbers of amateur real estate investors were created that leveraged beyond their means (their choice). Greedy/stupid/lazy brokers matched the wrong loans to borrowers. Poor borrowers asked for poor quality loans. Good brokers disclosed loans properly and turned away borrowers that were likely to default (this is the majority of loans). The bad apples have to be worked out of the system through normal business. Prices will fall creating value for the next wave of buyers. Those buyers will be smiling while you are crying. When one guy loses another guy wins, it's the way the market always works. Smart investors will be cherry picking the lowest priced homes. Investors on Wall street will capitalize on falling lender/builder/title/real estate stocks. Secondary mortgage funds will continue selling at steep discounts TO BE A GREAT BUY FOR AN INVESTOR THAT IS GETTING VALUE!!! Mortgage companies will start consolidating and the strong will eventually have all of the business because they will buy all of the paper from the failing companies through Bankruptcy court at a DISCOUNT. This is not rocket science. If you see the value to the next wave of buyers, it all is very clear. Jack1 is your real name Boomhower? The Federal Reserve and Government are always lagging behind the economy and are not going to “bail” us out. It’s too late for that, the snowball that has started the avalanche can’t be stopped. If you understand the basics of economics, you should have known that in 2004 when the boom was at it’s peak, borrowers abandoned the “expensive” 30 year fixed loans and took out a disproportionate amount of Adjustable rate mortgages to buy more home than they could afford (their choice). In addition, record numbers of amateur real estate investors were created that leveraged beyond their means (their choice). Greedy/stupid/lazy brokers matched the wrong loans to borrowers. Poor borrowers asked for poor quality loans. Good brokers disclosed loans properly and turned away borrowers that were likely to default (this is the majority of loans). The bad apples have to be worked out of the system through normal business. Prices will fall creating value for the next wave of buyers. Those buyers will be smiling while you are crying. When one guy loses another guy wins, it’s the way the market always works. Smart investors will be cherry picking the lowest priced homes. Investors on Wall street will capitalize on falling lender/builder/title/real estate stocks. Secondary mortgage funds will continue selling at steep discounts TO BE A GREAT BUY FOR AN INVESTOR THAT IS GETTING VALUE!!! Mortgage companies will start consolidating and the strong will eventually have all of the business because they will buy all of the paper from the failing companies through Bankruptcy court at a DISCOUNT. This is not rocket science. If you see the value to the next wave of buyers, it all is very clear.

]]> By: Finn http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/comment-page-1/#comment-2376 Finn Wed, 15 Aug 2007 07:09:02 +0000 http://blownmortgage.com/2007/08/14/freddie-mac-steps-in-to-the-alt-a-void/#comment-2376 Hey Steve, if you use creative accounting to reduce your income in the eyes of the IRS to something ridiculously low and can't get a mortgage thanks to your shenanigans - well tough luck mf. Next year either pay your taxes or save the goddamn money and come with the money to the bank. If people are making a zillion dollars a year they can save enough to have a decent LTV which will allow their officially low income to qualify. Stated income is a bad joke. The whole mess wouldn't have been created if there weren't ARM products at all. The prices of houses would not have ballooned. Even if only the stated income products, teaser rates and option-ARMs would have been banned before they became popular, things would probably be pretty ok. No bailout for idiotic speculators. A bubble created by excessive liquidity can't be fixed by more liquidity. If you were stupid and didn't see this coming, you pay the price for your stupidity. Hey Steve, if you use creative accounting to reduce your income in the eyes of the IRS to something ridiculously low and can’t get a mortgage thanks to your shenanigans – well tough luck mf. Next year either pay your taxes or save the goddamn money and come with the money to the bank. If people are making a zillion dollars a year they can save enough to have a decent LTV which will allow their officially low income to qualify. Stated income is a bad joke.

The whole mess wouldn’t have been created if there weren’t ARM products at all. The prices of houses would not have ballooned. Even if only the stated income products, teaser rates and option-ARMs would have been banned before they became popular, things would probably be pretty ok.

No bailout for idiotic speculators. A bubble created by excessive liquidity can’t be fixed by more liquidity. If you were stupid and didn’t see this coming, you pay the price for your stupidity.

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