Also, I never put anybody less savy into the loans and never have had a loan go bad in 7yrs yrs(when I got out of the business).

World pay option loans are not the problem but other providers miss used them and sold these products to people that did not understand them. Also, brokers were paid heavy amounts of yield spread to sell the loans. The problem with the heavy incentives on the back is it increases the neg am on the back for the buyer thereby increasing the chance of a reset(i.e time bombs that will explode). These loans are very bad when not used properly and without low ltv’s. That is what you are seeing with Countrywide and others i.e sold to the wrong buyer with insane ltv’s.

This is not a loan sold on the secondary market. We need someone with common sense underwriting. Quit being such the negative Nancy..

This is the old World Savings Port Product,. I dont know about CA or other states but have tried to get a deal closed thru them??? They dont go above 80% on OO, keep you at 75% on NOO and 70% on NOO cashouts.
They beat the living hell out of the property, they DO THEIR OWN APPRAISALS. So if they choose to lend on Stated, you can rest assure the home is worth what they are saying.

Since the crunch I have closed 3 deals at Wachovia, it was very painful to get it done.. and 2 of mine were full doc!

World Savings’ (now Wachovia) business model was and has been equity based from day one. Golden West Financial as you’ll remember its parent being called made a fortune borrowing money from borrowers (through deposits) and then lending it back to them for their mortgage notes. The perfect S&L and basically the last to survive the last 4-5 down cycles, debacles etc. What was their back bone? Strong Appraisal. Which ties in nicely with FNMA & FHLMC’s assumption that broker appraisals were C$#p.
World was the king at Value cuts in ALL markets. I would submit 80% loans and come back with 75% decisions in the early part of this run-up (2001/2002). It was amazing to me but I didn’t understand how it worked back then.
IMO the underwriters had to have undergone verbal abuse training because as brokers we could never call the appraisers ourselves.
So, now you have an idiot advertising an often toxic portfolio type of product based on values determined by the lender, in this case World (now Wachovia).
If history is any kind of reminder your advertised 70% LTV will come back @ 50-60% and presto 10-20% built into the product, not a bad gig if I’m lending money to you and I know you may soon jingle mail me and I’m going to have to service the REO for 1-2 years while I unload it.

BTW: Morgan: you were such a happier blogger when this first got going. What’s up? You don’t want to let posters hang themselves with their own rope vis a vis: Mike Hawk, ESQ?

Morgan, you are shocked, shocked about the talking points (no 4506t!) – please, this is boiler-plate copy. Just the latest iteration of the same tired email I sent out years ago as an AE, minus the spelling errors.

I have to laugh over your tags for this blog post: fraudulent loans, liar loans, mortgage fraud, stated income, stated income loans.

blah, blah, blah, what a crock of shite.

Pick-A-Pay as a loan program will survive and prosper, even when wholesale goes the way of the dodo.

The only thing they are selling is their Fannie / Freddie product line. By the way. CitiMortgage portfolios most of it’s product line as well.

I guess this post has generated so much feedback because it is a touchy issue. I have morals and ethics, and don’t make stuff up. If a self-employed construction worker tells me he makes $160,000, well, sounds feasible to me. IF Wachovia gives me an approval without requesting the income docs, what am I supposed to do? I think it makes sense. The guy has owned a home for 14 years without missing a payment, so roll the dice.