Thursday, December 20, 2007
Our first wedding since our wedding
This was taken by a friend at a coworker's wedding a few weeks ago. It was the first wedding Tony and I had been to since our wedding. She had a snowflake theme and imagine how happy she was when it snowed on her wedding day - it doesn't snow here.
Wednesday, December 19, 2007
Nederlandse iedereen?
I mean really, you don't even have to understand Dutch...
And just why was My Michael Bradley being interviewed?
That's because he got a hat trick! (3 goals in a game for those that don't know)
I know - he's amazing isn't he.........
And just why was My Michael Bradley being interviewed?
That's because he got a hat trick! (3 goals in a game for those that don't know)
I know - he's amazing isn't he.........
Tuesday, December 18, 2007
Continuation
To help back up my previous post......
The Fed makes lending changes
And in case I wasn't clear earlier this is how I assess the blame:
The government
Pres Bush stood up on a campaign of home ownership about 7 years ago and mandated that everyone should be able to enjoy in the freedom of owning a home. As a result, they gave an open pass to wall street to be as capitalistic as they wish (remember as you read all this I am a capitalist at heart). As more and more people started getting in homes it worked well for the economy as they also had a push to get more minority home borrowers in homes. The irony is they let Wall Street dictate the money boom with no restrictions, regulations or foresight. In the end, foreclosures are at the highest point in a long time and minority home ownership failed to grow. I believe it is still hovering somewhere in the 9% range. When banks started going kaput earlier this year - the government failed to react in a timely manner until the realized just how bad it was going to ripple the economy. One would have thought we learned this lesson once before.....
MBS/Wall Street
In a capitalist society where the leader is a capitalist beacon, if you let the inmates run the asylum - they will - and without a conscious. Wall street with its go ahead pass allowed mid tier (mid tier only in classification between brokers and Wall Street - not size of portfolio) lenders to create creative loan packages that allowed homeowners to get in homes. One of the more famous loan programs were Stated Income and Pay Option arms. Stated Income as defined in the article is where you basically are self employed and you tell the broker I make X - without providing documentation to back it up. Pay Option is where you have 4 types of payments you can make. One being a minimum payment which is below the principal and interest one can afford in a month - resulting in negative amortization. Reason Wall Street allowed these loans??? Higher payments off risk loans due to subprime originations. Allows for greater money to be made in the stock market trading mortgage bonds and portfolios.
Mid tier-lenders
30 fixed mortgage - what's that? A loan program that was the staple of the past, now pushed to the back seat - cause it is actually more expensive....ahem... I mean less affordable.Mid-tier lenders trying to make sure they keep up or out pace the competition pushed various loan programs off to brokers to get people in homes. And since they sell the loan usually within 60 days of funding - let's pump those mortgage loans through like a checker at a grocery store. Who cares if the borrower can't really pay - we have to have X amount of millions originated in loans this year.
Brokers
Acting like junkies needing a fix - who cares about the borrower - these no licensed (now they are in the past year) walk off the street from any other job such as a school janitor were funding your loans. If the loan funds they get paid their $2500 (approx)and the liability falls back to the lender that funded the loan. And to brokers - who really cares about referrals anyway - they had so much low lying fruit they didn't even have to understand how to run a business to be profitable. I could talk for years about this group - but will spare you.......
Consumers
Some of this is their fault - the eyes too big for the pocket book got some of these borrowers in trouble. Others - well they just didn't understand the booklet of crap to sign or that 1.5% interest meant for 6 months then it jacks up to 9% after that with a prepayment penalty lasting up to 2 years before you can refi.
And FYI - I was one of those borrowers on my first loan that had a bad broker. He told me 2 weeks before closing I would pay $500 LESS a MONTH than what came down at closing. AND he failed to tell me that my property taxes were NOT included in the loan. You say - well why did you do the loan then? Hmmmm well I had my cats, plants and now husband in a car after a two day road trip half way across the country to a house we had the movers already lined up to show in a few hours...........luckily, I refied before my lock went up and right before this bust became so bad. Otherwise I might be in the same situation as millions of other people.
The Fed makes lending changes
And in case I wasn't clear earlier this is how I assess the blame:
The government
Pres Bush stood up on a campaign of home ownership about 7 years ago and mandated that everyone should be able to enjoy in the freedom of owning a home. As a result, they gave an open pass to wall street to be as capitalistic as they wish (remember as you read all this I am a capitalist at heart). As more and more people started getting in homes it worked well for the economy as they also had a push to get more minority home borrowers in homes. The irony is they let Wall Street dictate the money boom with no restrictions, regulations or foresight. In the end, foreclosures are at the highest point in a long time and minority home ownership failed to grow. I believe it is still hovering somewhere in the 9% range. When banks started going kaput earlier this year - the government failed to react in a timely manner until the realized just how bad it was going to ripple the economy. One would have thought we learned this lesson once before.....
MBS/Wall Street
In a capitalist society where the leader is a capitalist beacon, if you let the inmates run the asylum - they will - and without a conscious. Wall street with its go ahead pass allowed mid tier (mid tier only in classification between brokers and Wall Street - not size of portfolio) lenders to create creative loan packages that allowed homeowners to get in homes. One of the more famous loan programs were Stated Income and Pay Option arms. Stated Income as defined in the article is where you basically are self employed and you tell the broker I make X - without providing documentation to back it up. Pay Option is where you have 4 types of payments you can make. One being a minimum payment which is below the principal and interest one can afford in a month - resulting in negative amortization. Reason Wall Street allowed these loans??? Higher payments off risk loans due to subprime originations. Allows for greater money to be made in the stock market trading mortgage bonds and portfolios.
Mid tier-lenders
30 fixed mortgage - what's that? A loan program that was the staple of the past, now pushed to the back seat - cause it is actually more expensive....ahem... I mean less affordable.Mid-tier lenders trying to make sure they keep up or out pace the competition pushed various loan programs off to brokers to get people in homes. And since they sell the loan usually within 60 days of funding - let's pump those mortgage loans through like a checker at a grocery store. Who cares if the borrower can't really pay - we have to have X amount of millions originated in loans this year.
Brokers
Acting like junkies needing a fix - who cares about the borrower - these no licensed (now they are in the past year) walk off the street from any other job such as a school janitor were funding your loans. If the loan funds they get paid their $2500 (approx)and the liability falls back to the lender that funded the loan. And to brokers - who really cares about referrals anyway - they had so much low lying fruit they didn't even have to understand how to run a business to be profitable. I could talk for years about this group - but will spare you.......
Consumers
Some of this is their fault - the eyes too big for the pocket book got some of these borrowers in trouble. Others - well they just didn't understand the booklet of crap to sign or that 1.5% interest meant for 6 months then it jacks up to 9% after that with a prepayment penalty lasting up to 2 years before you can refi.
And FYI - I was one of those borrowers on my first loan that had a bad broker. He told me 2 weeks before closing I would pay $500 LESS a MONTH than what came down at closing. AND he failed to tell me that my property taxes were NOT included in the loan. You say - well why did you do the loan then? Hmmmm well I had my cats, plants and now husband in a car after a two day road trip half way across the country to a house we had the movers already lined up to show in a few hours...........luckily, I refied before my lock went up and right before this bust became so bad. Otherwise I might be in the same situation as millions of other people.
Thursday, December 13, 2007
Foreclosures on the rise
A report came out today that said foreclosures were up 93% over last year. 93%!!! That's scary. Now I have a beef of this on both accounts. Many people will take the old school approach and say - well it is the borrower's fault - they should have known what they got themselves into before they signed anything.
Well being someone who is in this industry, I can tell you with certainly that that is a load of crap. Have you ever seen the documentation a loan officer puts in front of you to sign - not only for closing but prior to? Do you know how long it would take one to read and understand all the legalese?
Does a borrower understand what basis points are, how much the interest rate truly is for and what it means to have 2% plus prime? What is the prime rate? How can one find that number? What fees are paid to the broker, the lender, why does the appraisal have to be paid for up front and outside of the loan if in fact the rest of the settlement services can be included in the price of the loan? When will the loan reset? How much really does that equate to when it adjusts? Why would I have a prepayment penalty and how much is it? What does negative amortization mean? What is escrow? Impounds? How does Mortgage Insurance benefit me, do I need it and can I get out of it? What is RESPA? What is a kickback? Why is there 200 pages of crap I have to sign?
Is anyone lost yet? And that was basically the layman's terms I used. And really, what happens if a borrower objects to something in the document? It's not as if the bank is going to alter the language for the consumer to satisfy them, more like - if you don't like it then go somewhere else. meanwhile the borrower just wants the house.
SO I don't feel the issue is primarily on the side of the buyer and it is "buyer beware". How the heck is a buyer supposed to beware when the system is setup against the buyer in the first place......
And no the government should not be bailing out all these lenders either. Part of the irresponsiblity that the lender had getting wrapped up in too much greed and not enough fiscal responsibility. They should not be rewarded for bad management.
Well being someone who is in this industry, I can tell you with certainly that that is a load of crap. Have you ever seen the documentation a loan officer puts in front of you to sign - not only for closing but prior to? Do you know how long it would take one to read and understand all the legalese?
Does a borrower understand what basis points are, how much the interest rate truly is for and what it means to have 2% plus prime? What is the prime rate? How can one find that number? What fees are paid to the broker, the lender, why does the appraisal have to be paid for up front and outside of the loan if in fact the rest of the settlement services can be included in the price of the loan? When will the loan reset? How much really does that equate to when it adjusts? Why would I have a prepayment penalty and how much is it? What does negative amortization mean? What is escrow? Impounds? How does Mortgage Insurance benefit me, do I need it and can I get out of it? What is RESPA? What is a kickback? Why is there 200 pages of crap I have to sign?
Is anyone lost yet? And that was basically the layman's terms I used. And really, what happens if a borrower objects to something in the document? It's not as if the bank is going to alter the language for the consumer to satisfy them, more like - if you don't like it then go somewhere else. meanwhile the borrower just wants the house.
SO I don't feel the issue is primarily on the side of the buyer and it is "buyer beware". How the heck is a buyer supposed to beware when the system is setup against the buyer in the first place......
And no the government should not be bailing out all these lenders either. Part of the irresponsiblity that the lender had getting wrapped up in too much greed and not enough fiscal responsibility. They should not be rewarded for bad management.
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