Posted by
Sue on Friday, December 07, 2007 12:59:16 PM
12/07/2007 9:52 am PST
FROM THE ACTUAL TRENCHES:
My understanding is that Bush is NOT bailing the consumer(s) out of this crisis. He is leaning hard on the Lenders to work with the borrower(s) so that are housing market doesn't continue to crumble - in hopes of "stabilizing" our communities/economy.
Am I happy about this? Yes and no. I am a homeowner who has always played by the rules and also a casualty of this catastratrophe. I have been in the Industry from the early '80's and went into subprime 10 yrs ago. Unless you have been in the trenches - completely lived and breathed this - you have no idea of all the components that have led to where we are today. Most people are observing from the "nose bleed" section of this "event", giving their commmentaries and fingering pointing. Enough -
In the last 15 months I have been involved in 3 closures of major Companies. I am currently in jeopardy of loosing my home in the next several months. I have embraced the fact that I may just have to walk away. Do I deserve this? Hell no but neither do the tens of thousands of my peers. Not all of us sold our souls. We are normal people just like you who now have nothing to turn to and are being black listed. Having to start over when we should be focusing on our retirements.
What we should be questioning is who is being allowed/approved for these extensions? What is the list of criteria? For example, some very savvy Brokers and borrowers were refinancing (aka churning) their Option Arm's loans over and over again to take advantage of the teaser rate and going "stated"/"NINA"/No Doc (they were not required to provide income documentation - before you jump, there was typically nothing wrong with this because of their much higher ficos, credit depth/excellent payment histories, etc etc) and are they now being required to provide income documentation and are the Lenders processing a 4506? (form used to validate income reporting through the Government) If they can qualify to make the higher payments then they should not be allowed? Are they a United States Citizen?
I could go on and on...but I think that is where the focus needs to be. This newly founded "process" should be for the borrower(s) who truly cannot afford the higher payment now.
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This is from my daughter....she is 100% correct!. Let Bush and Congress know what it is they have to do to get this done the right way. Very, very few people actually understand Lending...I know as that was my field. When I started interest rates were 4 1/2%, gold was at $36 per oz, all loans were 30 years fixed and the qualifier was 25% of the your gross as your housing payment and practically no bills and 20% cash down minimum. I have lived through 4 housing crisis including this one. In each event, at the beginning of the next cycle, housing was more expensive, not less.