Toward the end of 2006 and early in 2007, this actually happened on the option arms through World (Wachovia). They started requiring qualification at the higher rate, at least that was my experience.

This sounds like that 2/28s, 3/27s and option arms were, by definition, because the borrowers were not told they did not qualify at the higher rate. Even if the borrowers new the rate would go up, they did not know they didn?t qualify. So this is why I believe the products were fraudulent”

What i don;t understand is why people like you, and all the other critics say things like this. Why do you automatically lump everyone that got a loan like this or sold a loan like this into the same category? Is every single loan aofficer that sold an option arm a crook? is every single borrower that got one frauded? Are all the bamks guilty of they sold these?

I say NO. I think a great many brokers out there were guilty as sin, where very dishonest people, greedy, and lied to their clients. I think many borrowers wer taken advtange of becuae they were stupid, niave, lied too, etc. However, i also think many, many borrowers lied to their loan officers to get the home and loan they wanted in their greedy beleif they would make big profits off it when it appreicated or where straight out fraudsters themselves. I also believe there were and still are many honest brokers who used these programs wisely and to their best of intentions to help borrower achive their dream of home ownership when none existed before. That they clearly explained the rules, the pros and cons, and caps to them, and that the borrowers didn;t care or said no worries, they can pay for it.

I personally did not do more than 10% of my business as option arms or subprime 2/28 and 3/27’s, but the ones i did, i made sure they knew what they were getting into, and explained how they could get out of them as soon as possible by keeping their credit clean, their payments on time, not taking out any new debt, and raisign their scores over 6-12 months. Those that did, i was able to refi them inot conforming fannie mae loans or Alt A prime loans at 30 yr terms and lower rates. The ones that kept on ruining their credit and taking out new debts and not paying their bills, are the ones being bailed out today.

Alot of people had a hand in today’s problems, but when people say that brokers and banks took advantage of people and the borrower didn;t know what they were signing, that is not right. My father always taught me froma young age, read the fine print before you sign anything. Someone should teach these borrowers the same thing and the goverment should license all of us brokers so the publice can feel secure using us down the road.

As a Mortgage Broker in Texas, I am going to say this until I die or get out of the biz.. .Why is that the states with the biggest mortgage crisis are Democrat strong hold states??? And last time I checked,, Beneficial, Ameriquest, Citi-Financial, Centex Home Equity are all Mortgage Bankers, NOT MORTGAGE BROKERS.

Lets see, CA, Ill, and NY have the country’s most pathetic consumer lending laws?? Now the Dems are acting like they are helping out,, well where were these people before, Why did these so called do good Democrats all of sudden have this great plan?? they are simply pandering for votes.
Question? who thinks its a good idea to cash out your homestead to 125%??? In Texas you cannot exceed 80% of your homes value and you cannot do a Homestead Cashout within 12 months of the first Homestead Cashout and our total fee’s excluding pre-paids are capped at 3%.!!!! we already have good laws, we dont need more here in Texas.

And now my rant on Realtors and Builder owned Mortgage Companies..
Realtors made billions in the past 5 years due huge commissions being paid by Builders to bring in 1st time buyers and luring them in with all these so called ‘incentives’, which in reality all that did was inflate a home values that could not be justified in the long run.
I had so many buyers with realtors in tow pushing for the most they could afford.. not once did the realtor say,, “you know yall really should buy something more affordable,” hell no, all that realtor did was shut his/her mouth so the seller would pay them 8% at closing.
Per my B-Paper reps over 50% of every Subprime wholesaler pipelines were builder owned Mortgage Companies buyers!!!!!!!!!!!!!!! NOT MORTGAGE BROKERS…

anyway back to work my mini refi boom is going strong!

Great more bad press for mortgage companies!!

According to the dictionary, fraud means “1 a: deceit trickery; specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right b: an act of deceiving or misrepresenting : trick
2 a: a person who is not what he or she pretends to be : impostor; also : one who defrauds : cheat b: one that is not what it seems or is represented to be”.

This sounds like that 2/28s, 3/27s and option arms were, by definition, because the borrowers were not told they did not qualify at the higher rate. Even if the borrowers new the rate would go up, they did not know they didn’t qualify. So this is why I believe the products were fraudulent. Why can they make up these rules as they go? Why can they offer products like this that they have to cheat to qualify? The cheating is built into the loans. The consumers, although stupid, did not invent this product. The people who did this did it for one reason only…to skirt the legitimate underwriting of loans. Period. I don’t know how much more fraudulent you can get.