... I made a mortgage loan to the brother of a guy I knew in passing. The brother was in a bind of sorts, though he had a ton of equity, never payed his mortgage late once in his existent, yet worked at a Pizza Shop. He couldn't quite prove all of his income. Ya know, the under the table stuff Uncle Sam likes to peek at? He had a choice in programs, I actually agreed with his decision. (Of note, his decision didn't make me any more or any less money on that transaction.) He'd take a lower rate (that would change two years to the date) now and save some bucks, put his credit (the score, he wasn't that bad of a credit file) in better shape and refinance into a more permanent financing down the road.
Well, we're down the road. He's still got a ton of equity, never missed a beat with his mortgage payment, yet has that 'can't totally prove my income' issue. His credit score, while going up impressively, didn't reach a magic 720. And even at that, the rate was rather robust compared to current market interest rates. But the rate is just conversation; I can't do a thing for him right now.
Actually, that's not entirely true... as they are coming into my office Tuesday and we are going to have a conference call with the current mortgage holder to try and modify the terms of their loan.
Stated Income Loans have always been a last resort, for specialized and unique situations. Self-Employed Borrowers, Restaurant workers, Painters, Construction workers, & various other trades; sometimes have that stigma of funds coming in that Uncle Sam never sees. Now, I've heard the argument that those folks deserve to pay for the fact that they don't pay taxes like the rest of us... and I agree to a large degree. However, playing Devil's Advocate, the whole tax structure is borderline criminal in the first place. That's my opinion, at least... and probably another conversation at another time.
When you have the Government getting involved in the Mortgage Situation going on, we've got a problem. Let me explain why:
- Real Estate is a cyclical industry, always has been and probably always will be. I'd venture to take an educated guess that just as many folks have thrived on 'down markets' as 'hot markets'. Let the industry work itself out. Politicians typically know as much about mortgages as I do about Hydraulic assisted brakes on an automobile.
- I heard the oft-mentioned rumor that Stated Income Loans were to be banned in the state of Pennsylvania. I've also heard they already have been in several states. Stay out of it, Mr. & Mrs. Government. You have about as much room in the Mortgage Industry giving birth and reality to your litigation as you do on telling owners of restaurants and bars that nobody can smoke a cigarette in their establishment. Think about it folks, I have a question for you... other than more money in your pockets, make a rational point of what your reasoning is? If I had a cool billion dollars to play with, I'd lump you a sum and tell you to go away. Sadly, you would. Because that's what it is all about... when ethics and humanity come back into the equation, wake me up... I'll be sleeping on the other side of "Geez, have I always been this cynical?"
- Of course the Government doesn't like Stated Income Loans, those loans are going out to people who may or may not be reporting all of their money to the system in place. Come to think of it, I may divulge myself in Tax Laws very soon... I can't stand what I'm seeing. I've got a guy who has always paid his mortgage on time, has an immense pride of homeownership (you should see his garden), and because of 'market conditions' and his inability to verify income that is actually coming in the door... nobody wants to lend to him. Throw common sense out the window my friends, this guy owes about half of what is house is worth. He's lived there since 1988. Does that make sense that nobody wants to make that loan?
Sub-Prime Lending will be back. I did and do most of my stuff Conventional (for those who are credit worthy, can document income, equity involved, etc) but there's a market out there for folks who don't fit those parameters. Rather than them having to deal with expensive finance companies, slowly you will see common sense lending entering the fold. If the going rate on a 30 year fixed rate mortgage is 6.5%...if you can't prove your income and have equity in your home (hopefully reserves in the bank)... I'll charge you 8.5% for the privilege. That makes sense, to me.
And Gus, you'll probably never read this since you are about as internet savvy as that Republican Candidate (I kid John, I respect him very much)... I'm going to help you out. I just wish that I could help you out in a different way... my way.
Jason, I thought the stated income (or liar loans) were pretty much out. So this is news to me, but I agree with you with the government monkeying with anything it gets to be more a mess.
Amen my brother. The stated income loan was bad mouthed because of greed. When we started offerring stated income loans to W2 people with 540 credit scores, it had to hit the s**t. We still need it for this type of customer.
Jason, I have rental property and a second home. I have a few years on my loan, it was not subprime, but I have so much documentation I have to come up with for a loan, I just don't feel like it. I never lied about my income, never late on anything, lots of equity and we have high credit scores. I am going to wait until the "dust settles" to refinance my second home. I could do the refinance, but I like the " fast and easy" because it is, so this loan helps people like me.
This type of loan is what helped me buy my first house in 1988 when my husband and I were in this same type of "Gus" business - pizza shop owners. It was the only type of loan we could get, and that first tiptoe into homeownership helped us catapult into investment and commercial properties. It would be a shame if this kind of loan was erased completely, because there are hard working business owners, self employed, sub contractors, commission only workers, and the like, who should be treated like first class citizens. These are the same people who don't look for government handouts, grants and the like, because very often they don't expect handouts from Big Brother. They are also the same people who can't afford their own health insurance because they can't get a group rate and pay medical bills out of pocket without relying on Uncle Sam for clinics and government paid health aide.
Okay, I'm off my soap box now. As you can tell, I'm fairly passionate about this topic. Bravo for a great post.
The problem was caused by people lying about their income and getting qualified for loans they could not afford.
I do not want to see them used as a tool to help those who are not paying their taxes. They are causing the rest of us who play by the rules to pay a bigger share.
I personally used a stated income loan when I first got into real estate. My income level changed and I did not have two years worth a tax returns at that level yet.
Jason.... I agree, there are programs for many people, that are no longer around, that did help. But I semi disagree about the subprime loans. First, I don't believe that they will come back 100%. Especially those with 100% and 95% financing. And if they do, you will need credit scores above 620. Their problem was making loans to people with 580 credit scores with no money out of pocket, with a 50% ratio. Half of your income going towards your mortgage? Not a good thing.
In regards to stated loans..... one thing to think about. Randy makes a great example that I did think about earlier, when we spoke about these. Yes, if you don't show your income, hide from paying taxes, we should give you a loan and possibly raise your income, because you are need to show more money to qualify? A catch 22 in a way. If you look at it, many stateds are foreclosing just because of this. I think we need to just go back to the mid 90's and make them hard to obtain. Great credit scores and strong LTV's. If not, show your income.
If he already has his loan, why is he having to refinance? Did I miss part of the story?
So, Jason, should we be talking about the FairTax?
But, I too am torn. I think that the current tax system is way more broken than the health system, but it still is the law, and I have issues with settingh things up to benefit those that are skirting the law...
Tough issue.
Gary - In my view, Stated Income loans have a place. If the government of this fine country wants to mess with that, they will. When I graduated High School, I wish I had the same passion I do now. I'm going to read up on Tax Laws....
Fred - Exactly! That was the problem with what was going on. You give me low credit scores and a guy who works for Home Depot who can't prove his income... that's an issue. That's not only an issue for the lending institution, but for the borrower. After all, we have an affordability thing going on. Sleep principal man...rests in peace....
Audrey - It sure makes it less of a headache. Problem is, headaches seem to be the loan du jour. As I've told several people, the inventory is large and the money is still pretty cheap... that's the good news. The bad news is that you will be jumping through hoops, that's just the way it is right now.
Jeannie - I admire your passion and feel the same, to an extent. This, my dear, is the type of stuff we are fighting for ... I do it daily.
Randy - Good points. While I think the tax system is a complete and fraudulent mess, you point out something that simmers and remains true. Folks who abused the system screwed it up for others who utlilized it and remained true to their word. Personally, all I ask for is Common Sense Lending.
Belonger - I agree with you on that, Sub-Prime loans at 95% or 100% LTV's won't visit us anytime soon, thank sombody's God. "The brother was in a bind of sorts, though he had a ton of equity, never payed his mortgage late once in his existent, yet worked at a Pizza Shop." At worst, 60% LTV with a crystal clear mortgage history. FHA won't do it, Conventional won't do it, you tell me that there isn't room for that borrower in ANY portfolio? To me, it's a damn good loan. He has shown everything (stability of job history and housing history, clean mortgage history, extremely low loan compared to the value of his home, yet his capacity to pay is in question). That's been proven, just not documented.
Barbara - He took out a loan and that rate was going to adust in two years... time's up.
Lane - Very tough, you're right. I guess my qualm arrives when we have the Federal Government getting involved in the Mortgage Industry (outside of the FHA & VA). Too many unnessary noses involved in an equation that just renders itself fixable. If Lenders don't want to do these loans, fine...I think they are missing the boat but that is their decision. If the Government is telling folks that they can't do these loans....different story. I don't feel nice anymore, I'll knock their lips up into their eyes...
I find it interesting that people with a 580 credit score can get a mortgage if they can prove income, yet I have a 740 score and need to go stated, but can't get a loan because I have over 10 investment properties. Now who is a better credit risk - someone with a 580 credit score or someone with a 20 year track record of perfect payment history? There is no common sense in that. Banks are losing money now by being too conservative with the wrong people.
Jason.... I agree with that scenario. BUT.... again, if people would show all their income and not hide.... pay the taxes, they would also have a great shot at doing a lower fixed rate. It's lesser of a risk for the investor.... just a fact.
@ Lisa.... you can still be a risk. It's an investment property. These are more likely to foreclose than a primary property. If you got into income trouble, you will protect your primary property first, before the investment properties. Also, you have renters, which at any time could stop paying rent. I know you are frustrated, but there is a reason why it would be tougher for you. Just my .02
Jeff - if they look at the fact that I have 30% downpayment and tons of equity in other properties and money in the bank - years worth of reserves, I think they would see that the risk is minimal - I am not going to ruin my good credit that it has taken me years to build - just isn't going to happen. They should look at the big picture and not just say no because I have so many propeties. If every tenant moved out, I could still pay my mortgages. Plus, I'd get new tenants. Their not looking at the big picture is causing them to lose out on a good borrower and preventing me from helping out the market and the econonmy by buying more properties.
Jason, you can't treat one person different than the rest. You have to treat them all alike. Will we see stated again? Only if investors buy them and they won't buy them unless they are guaranteed. I have a sweet old lady as a client. Owns a $2M home with a $500K mortgage. She rents out rooms to make ends meet, just does not have enough retirement income to support that mortgage. Can I refinance her? No. Would she like a little cash out to do some repairs around her home? yes. Will she survive? yes. It is just a qualify of life thing. Aj
Currently Freddie is not guarenteeing any stated. Fannie will but is restrictions....
Jason - I have mixed feelings on this one. Do stated income loans have their place? Yes, however, I have a problem with people using them to finance their homes while hiding their true income from the government, leaving the rest of us to pick up the slack. Life is about choices. And while no one had a crystal ball and knew where the market was going, 2 years ago the market was shifting. Gus had two years where he could have declared all of his income. Instead he preferred not to pay taxes and now can no longer re-finance.
Bro,
I'm not an expert in your business so I can only think in a common sense frame of mind. I can't see sub prime coming back either. I think they have left a bad name because of all the lying that went on. I would imagine if stated income loans are still in our minds ...as long as there is a way to make sure it's legit. Obviously anyone could lose their job or get a pay cut after the fact but I would rather show what I have and what I'm paying instead of paying a few points just so I can get a loan with no background. It will only hurt those later on in the cycle.
All I can say is it was easy to lie and get away with it...I'm wondering if the mistakes that were made are going to be corrected...so far I'm still getting some crazy proposals sent to me. That tells me either they are stupid or really think they can still get a way with it.
Jason,
Excellent points !!!!! The way things are set up is a little crazy. Where someone who has a 580 credit score and a couple thousand dollars can still get a FHA loan and these self-employed folks who are overly qualified are having difficulty, something is not right. I hope the situation you referred to gets rectified. And I agree with you, sub prime will be back, probably sooner than people think.
The Somers Team
Hey folks - let's not lose focus on one thing here...
There is a big difference between a Sub Prime loan and an Alt A loan. Mostly being credit and reserves....
Take the Alt A program away and people are going to lose their houses if they can't refi.. Sure the Alt A investors got greedy and pushed the envelope on credit guidelines with scores and LTV's, but take away no doc loans from the 720+ score borrowers who can document assets?? please..................... just hold a gun to most self employed business owners why don't you.............
Jason, I am glad you decided to return from your brief hiatus...frankly, I have not seen or heard of a loan professional who wrote in such an interesting or articulate manner. It's refreshing because in Texas we say that it is easier to get a mortgage brokers license than a fishing license...scary proposition for buyers and sellers BOTH
Thanks!
I fear the pendulum will swing too far to the left.....time will heal and these products will gradually come back (I hope.)
@ Lisa... I am not going to disagree with your comments and frustration. My main point was that you are still more of a risk, great credit score or assets, you are. You can never predict the future. Your primary house will come first, no matter what, right?
@ Christopher and Stephanie..... just curious... how can you say that subprime will come back. It's still out there, but you need excellent scores to even get to 90%. Do you know that this means FHA is the best program in regards to most supbrime deals... and should have been 4 years ago. Especially when the subprime market allowed for a 50% DTI ratio on 100%, 95% and even 90% LTV's.... and that is for a front and back. ... just one ratio. So, 50% of my debt, which could be my mortgage payment, even at a 95% LTV? No room for error and the rates are higher. And one other thing why subprime was abused in my opinion... I knew, first hand, of loan officers putting a client into a subprime loan before they put them in a FHA loan. Even if they had FHA financing... you want to hear what 2 loan officers told me point blank? " FHA was more work for them to help their consumer. They can refinance in a year or so, when they get things back on track." OUCH.. rut row. I blame part of what happened just because of statements like that. I always said that at least 30% of all subprime loans should have been done FHA and I will still stand behind that.
Am I saying that subprime should not be part of the market? No.... but it should be very limited, just as it was when introduced in 1994 or so.
Jason,
Governmental control is slowly creeping into more and more areas of our lives and I see it as losing more and more of my personal freedom. Dangerous!
Jeff, a self employed professional with 19 years experience in the business should be able to predict their income. I wouldn't be buying more investment properties if I couldn't comfortably afford them. There is no way I am worse of a risk than a 580 credit score borrower with few assets and few reserves - no way!
Forgot that I also wanted to comment on Cynthia's comment - Cynthia, I agree with you 100%! The government should stop stepping in and interfering and let mother nature run its course.
I agree with Cnythia's statement also, that we need to allow the market to take its own course.
@ Lisa.... I shouldn't be replying again, but this is my professional opinion. You are taking this personal. I never said you, personally, are a a greater risk than someone with a 580 score. But that you are considered a risk. And in all honesty, that person with a 580 score, it could be because of major lates from 4 years ago due to a family death, loss of job, or a bad divorce. And they have collection accounts from back then and never cleaned anything up. If their credit was perfect for the last 3 to 4 years, but with negative stuff from the past, their score could still be that low or lower. Now, you are making a judgment call also. Just as I did with stated programs on an investment property.
Overall, I will stand by this statement. You are still considered a risk. It doesn't matter if you are 19 years in the same business and successful. Anything at anytime can happen. Why don't you ask my previous client who lives in Florida who had 17 years of experience in her same field and all of a sudden, something major happened.
I do believe that some programs shouldnt have changed. And because of this, it hurt you from buying more properties. But go back and blame part of it on those loan officers and or lenders who abused the system. THose that put consumers into programs that should have never been put in to begin with. Or those that doubled someone elses income as a stated, just to make the deal work. We could be here all day and dissect what happened and what didn't. I will say that Wall Street and some of the investors got a little greedy. Think about it... 100% stated and even 100% No Doc loans where out there.... those types of loans left no room for error. Even the 100% investment property loans that were full doc. There is a certain risk behind each program. And in general, a stated loan, especially on an investment property, is a greater risk than a full doc loan on a primary mortgage, even if the credit score was 580. And this could be debated all day. But when you compare default rates and foreclosures on what was mentioned, you will see more stated investment loans that took a major loss. Those are stats that don't lie. Again, all just my opinion.
Nice spirited discussion :>
Subprime loans fill a specific gap in the financing matrix, IMHO. Do I like them? No, but if they are handled responsibly they make things possible that SHOULD be posible but "can't be done" according to the system we have in place.
Aww heck. Here are my two cents. Stated loans should never be made to wage earners (those receiving a W-2). I say that even though I was able to buy my house with a stated loan and I am not self employed. The above pizza shop scenario should not have closed even though I was intimately involved in helping you close it. I do not say that from a moral stand point but rather a good business sense stand point. I do not think this is something that should be legislated, I think the business has self corrected.
My greatest concern about the current state of our industry is what is going on in the government loan world. The FHA is NOT a subprime product and if it gets used as such (and it is) they will experience the same issues that the GSE's are dealing with. These loans are not going to perform any better than their subprime cousins, have much lower yields and crap, they're backed with the tax payer's money. But hey, it's great for the people making money off of them now. Just like it was great for the people who made money off of subprime loans. The concern is that if the FHA sustains the losses that the GSE's are sustaining it will severly limit the average (read: decent but perhaps limited credit, limited cash reserves, good job history etc) American from buying a home.
As for subprime coming back. boys and girls, it never went away. Not real subprime. Equity based, high cost, make sense deals. 35% real equity or better, skin in the game, a story that makes sense and can be proved. All day long at 12-14% interest and 8-12% inclosing costs. These loans have always been available and still are.
Ok I'm absolutely shocked Jeff hasn't chimed in with this one yet...
Stated income still does exist, and not the "conforming" or portfolio stated we are all referring to. FHA streamlined refi's allow you to lend without verifying income or even credit, outside of their mortgage payment history! Jason I think you are 120% right to be pissed at the system that would see your pizza guy maybe lose his place when if he was refinancing from FHA to FHA he'd be closed by now. Jeff, I do agree the subprime thing went wacko, I think we all do; but I also agree the pendulum has swung too far. Good borrowers, with good scenarios are being forced out of a market that desperately needs them because our business has gotten too political. Wasn't it Minnesota that first passed the "no stated loans" legislation that had to be fixed in a rush because it did prevent FHA streamlines? If "smart politician" is an oxymoron, and stupid politicians make stupid laws; then where do we sit?
Instead of FHA Secure if they would have just opened Streamlined refi's to be eligible regardless of the original loan type (ok, even at reduced LTV's), we might not have suffered so hard.
To you both, I have a single mom waitress who has a broker's license and put herself in a subprime to get her first home 2 yrs ago too. Unfortunately she doesn't have the equity your guy has Jason, but she has made payments religiously and now faces a $400/mo jump in her PITI. An FHA refi would lower her current payment by $100/mo but since she can't qualify she's losing the home. Say what you will but I think that's wrong, and a market that's looking for profitable investments should think it's wrong too.
Gerry Suarez, Jr.
Your HUD Loan Pro!
"inability to verify income".......
Simply means that a person is breaking the law by not reporting income. I have no sympathy whatsoever for these people and wish they be caught by IRS.
If you make a buck, you REPORT that buck. That's the law. Condoning lawbreakers because a commission can be realized is sad indeed.
I may not like the tax laws - but I'll be damed if I'll protect those that violate it.
Jason, very good points. The government has no place in regulating what it doesn't understand. Funny how they thought that so called stimulus would actually help people. Thanks for the $1000, now what do I do next month to stop foreclosure? Have you heard this? I have. I really haven't been commenting a lot on posts because they seem like repetitive overmade points that won't change anything. I like your way of thinking, however, don't worry, I won't butter you up like others I see, sorry, I'm not a chearleader or kiss ass.
By the way, I thought you were done here, glad to see you arren't. I am sick of reading fluffy BS stories about how somebody's kid finally got a pony because they finally closed a deal.
Anyway
Jeff, I like some of your thoughts as well (and not just because you let me do the week in review) but because you are rational. There is a place for subprime but it's kind of like the DMV, you only go there when you have to and want to get frustrated.
For all the loan officers that did and now depend on subprime as their main source of business, sell ebooks through spam or just leave, you are not helping anyone buy yourself.
I think I have a case of the frustrated, sick of the BS bug so don't get offended anyone. This too will pass.
Rob, regarding your "inability to verify income" comment it really is not that easy. Our industry penalizes the self employed for taking advantage of tax benefits due them. As a business owner I can frequently write off expenses that would otherwise not even show up on an employed individual's application (home office tax deduction is an excellent example). The self employed person's income is reduced by that but the salaried is not. That is why stated income was born, and that is why we still need it for the self employed.
Gerry Suarez, Jr.
Your HUD Loan Pro!
Interesting thread...
I'll be back when I have the time.
Gerry - I'll think a little bit more about your comment.... and how it relates to the 'waiter' that says he makes $100,000 on tips - just doesn't claim the income. :^)
Rob- Fraud is fraud, that's what you are referring to. I'm referring to loan programs and their guidelines. If you think there is no fraud in conventional conforming full doc you have led a sheltered existence. Does that mean we should do away with it as well?
Gerry Suarez, Jr.
Your HUD Loan Pro!
I knew exactly what I wanted to say until I read this thread. I would get clobbered if I gave my true opinion about those who don't report all of their income. I'll just say that I am sick of the pot calling the kettle black. The government needs to play fairly and honestly if they expect the people to do the same. Most are simply trying to survive and making the most of the deductions they can legitimately take - not trying to 'lie' at all. Our country was founded on the ideals of entrepreneurship and penalizing those of us who are self employed by offering fewer loan options is simply wrong.
lol Gerry. Sheltered Life? No.... not even close. I don't know one waiter that claims 100% of their tips, do you? :^)
HOWEVER - I'm a Title Guy, not Mortgage Guy..... Jason's my mentor...... I learn something everyday (ok, slowly).........
....and understand your concerns that the self employed have significant legal tax right off's compared to non-self employed, and want to be eligible for the identical loans regardless of income proof.
OK.
Well Jason you already know my feelings on this. The funny thing is if you remove "pizza guy" from the scenario and change it to "pizza shop owner" it becomes a totally different story.
As far as your comment about subprime lending coming back, you know I love to be unpopular so I am actually going to AGREE WITH YOU! I don't think it will be called "subprime" as that's become a dirty word but there is definitely a market out there for people who don't fit within the conventional or FHA guidelines, which someone will be willing to lend to at a higher price. The market may need to cool off some more first but when it does you're going to see more and more niche products creep up.
To address everyone individually would probably be proper, but time isn't on my side on this one.
Oh, hell.... what the heck:
Lisa - Common sense and lending seem to have hit a brick wall. This knee jerk reaction is just as extreme as the one giving my cat Baxter a mortgage. I hear what are you saying, practice patience.
Jeff - That is a fact. I have no qualms with that. What's laughable is some of these loans that I see getting bought in lieu of this example which makes more sense. This is a 'handshake' loan, a human...manual... type of thing. I'm basing my case on two other facts, he has collateral out the posterior and has never been late on his mortgage. His 'credit bumps' were and are small medical collections. Give me a credit line, I make that loan any day of the week.
Lisa - If you understand risk, you'll have some semblance of understanding of where lenders are coming from. Then again, I hear what you are saying and firmly agree. It seems folks like you are being punished by the misdeeds of others.
AJ - While I realize it is a volume thing, automation has its weaknesses. Look around, that's obvious. Underwriters at such entities as Wells Fargo, Countrywide, etc... seem to know very little about anything other than automation. I'll agree to disagree with anybody on this deal, manual underwriting is severely lacking these days...
Sandra - Understood. I have a problem with the whole tax structure, myself. None the less, it is what it is for now. That product was available and now ... not so much. Proceed accordingly.
Neal- If subprime doesn't come back, then finance companies will reign supreme for those folks who are just outside of the mold of conforming and/or government loans of any kind. That's an expensive proposition. 65% of my business has always been conforming, the main problem with subprime is they were going so extreme that they were priced near and sometimes below conforming rates. They were too cheap and the LTV's were too high. End of story.
Christopher & Stephanie - It will probably be rectified this week. They came in this past Tuesday and I got the company now servicing their mortgage on a conference call. I'll post about it when it is finalized.
Lewis - I used to refer to Alt A as a marketing gimmick. To an extent, I believe it was. Though I will agree that those products will be available once again. Hopefully at that time, they are priced and treated accordingly.
@ Belonger - You babble and make sense, all at the same time;-)
Jeff - Well put, and if properly executed I agree with you fully.
Beth - It should have never closed at an adjustable rate, right? You are a smart cookie and know the inside and out of this industry... we may disagree on that one.
I concur with you on the FHA... hands down. As far as subprime, what you laid out is a bit too expensive for my taste (sounds like hard money... and needed in some cases) but there is a middle ground that is missing.
Gerry - Let me simply state, Mr. Gus will not lose his place. He's not and has never been even a month behind. It is being taken care of and when finalized, I will post about it. I'm not extremely familiar with the FHA secure product, but streamlined approaches to lending have been the soup du jour throughout the past years. As long as the parameters are clear and the borrower is living up to their end, I like that product and idea.
Mr. Rob- Do I sense even the remote version of passion coming from your end? Hell man, I don't like the idea that folks can and do skirt the tax structure either. Maybe I'm cynical or downright wrong, but I think it's more prevalent amongst the big wigs than the person serving you a Western Omelette at Denny's. I know I sound 'Marxist' at times... which I'm not, but the pendulum of consistency is a tad off beat. That product was available, still is on certain terms. You've probably done some title work for those folks. Overall, you have a valid point and concern. Perhaps I'm just out to 'buck' the system... or at least make it consistent.
Ron- Ok, you made me laugh and that isn't easy to do. I'm liking you man...I loathe buttering up and kiss asses. It's a shortcut to thinking.
Gerry - Preach on, brother. :-)
Sardi - That was a horrible comment.
Rob - I was a waiter and if I was making that sort of cash flow, do ya think I'd get myself involved in all of this? Personally, the most I ever saw 'Stated' for a waiter was about $60,000 and they worked at a fine dine place in Philly.
Gerry - Absolutely... no argument from me on that one.
My Jennifer - We've spoke about this, want to get married so we can pay them to announce our joining? Kidding, I agree with you hun... very much so.
Rob - It's a risk factor. If you can't prove your income, you pay (or at least should) for the priviledge. Or, you can document everything and avoid write-offs and all that other stuff... and pay Uncle Sam. Your choice.
Michelle - Understood. Wage-earner versus owner... I get that.
As far as you loving to be unpopular, welcome to the club. I'm much the same but it didn't turn out that way. I'm believing more and more that most people appreciate honesty and passion. Either that or I'm one hell of a bull shitter;-) Subprime comes back in early to mid 2009... I've been wrong before but that is my opinion.
Jason.... here is my take.... subprime loans don't come back until late 2010, even if they do much. There aren't any US investors willing to take that risk right now. You will need a foreign investor to do this and many have been burnt in the last year or so by us when we sold them misleading mortgages, telling them that they were buying performing pools.... all the while we were sneaking in some none performing mortgages into these A pools. If you understand how all of the works, it will better explain on why I don't see subprime loans for a long time to go. Yes, they had and have a place in today's market.... but with 15% to 20% down... and how many people have that? In more cases or not, I would be able to take them FHA then.... not unless they had all lates in the last 12 months.... in my opinion, it's just not there, if they need to go back to guidelines from 1994 to 1999. Again, just my humblong, babbling, .02.
PS... the only type of subprime that would be good are the stated loans.... but many that do these want a 60% LTV or lower, depending on the credit score.... I truly think if more people showed their income, it would be different. Now, I do believe in your basic tax write-offs.... but every little thing, so you don't pay as much in taxes? And you want a good loan? hhhhmmmm
Mr. Belonger - FHA is a wonderful product. I truly want to preface that before I go further. That said, I do believe that we will be having a different conversation two years down the road. There will always be a place and a time for a FHA Loan, as most others. As far as folks who can't prove their income, they pay more for a loan... end of story.
Does this song ring a bell? I've got the cure for the disease but it ain't free;-)
Jason,
glad I could give you a chuckle, whatever the hell a chuckle is. If you ever want to chat or blow off some steam, just give me a hollar.
Ron
(McDonalds new hire)