If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(Marketwatch)   Because it was so successful last time, No-money-down mortgages are back   (marketwatch.com) divider line 11
    More: Fail, investment portfolio, subprime mortgage crisis, arbitrages, medical doctors, mortgages, student debt  
•       •       •

7836 clicks; posted to Main » on 01 Feb 2013 at 3:41 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



Voting Results (Smartest)
View Voting Results: Smartest and Funniest


Archived thread
2013-02-01 03:55:01 PM
4 votes:
100% financing wasn't the problem.
Risky loans and adjustable rates weren't even the problem.

*Systemic fraud* was the problem.

As long as these loans are marked as what they are, are actually underwritten (and not fraudulently rubber-stamped even when they're trivially fraudulent) and ratings agencies don't use known-bad risk models to declare dog-shiat as solid gold, there's no problem.

And one could sleep better knowing that was the case, if anyone who was actually busted for that systemic fraud was treated half as harshly as the poor shlubs who tried to blow the whistle on it.
2013-02-01 03:45:07 PM
3 votes:
Only fail I'm seeing here is a subby that didn't read the first 2 sentences of the article:

"Banks say these loans are safer: They're almost exclusively being offered to clients with sizable assets, and they often require two forms of collateral-the house and a portion of the client's investment portfolio in lieu of a traditional cash down payment."

Because highly collateralized loans are what ruined our economy.....
2013-02-01 03:52:48 PM
2 votes:

Necronic: a portion of the client's investment portfolio in lieu of a traditional cash down payment.


What a good idea. Instead of a cash down payment, you're taking a lien on semi-liquid investments that are highly vulnerable to negative economic swings-- the very same swings that, when they occur, might prevent the buyer from making the mortgage payments.
2013-02-01 06:33:01 PM
1 votes:

ringersol: 100% financing wasn't the problem.
Risky loans and adjustable rates weren't even the problem.

*Systemic fraud* was the problem.

As long as these loans are marked as what they are, are actually underwritten (and not fraudulently rubber-stamped even when they're trivially fraudulent) and ratings agencies don't use known-bad risk models to declare dog-shiat as solid gold, there's no problem.

And one could sleep better knowing that was the case, if anyone who was actually busted for that systemic fraud was treated half as harshly as the poor shlubs who tried to blow the whistle on it.


This.

 There are still 0 down loans out there if you know where to look. They've been there this entire time.

 They need to stop blaming the homeowners for losing their jobs and going broke on a house loan they could previously afford just fine.

 They also need to stop blaming homeowners for believing the information given to them by the *professional* they *hired*. If the professional was selling snake oil, they need to be dealt with. Hopefully the person they took for a ride is a bit smarter now, but being taken advantage of is not exactly a criminal offense...most people try to avoid it actually.

/it would be like blaming the patient for taking medication prescribed by the doctor and finding out later it was the wrong one.
//some people would catch it before they took it, but not catching it doesn't make you responsible for the prescription the *doctor* gave you.
2013-02-01 04:26:41 PM
1 votes:
To people with "sizeable assets", vs the taco bell employees that used to buy the 300k house.
2013-02-01 03:58:27 PM
1 votes:
It's not so much the no money down that failed last time; it was the type of loans given. APR loans, and interest only loans, crap like that. People bought too much house, or never were in the position of owning a house in the first place.
2013-02-01 03:57:49 PM
1 votes:
A)  There is nothing wrong with 100% financing to people who actually will and have the capability to pay it back.
B)  These mortgages are actually backed by collateral
C)  It's already not uncommon for people to take out two mortgages that combine to the 100% anyway
2013-02-01 03:56:15 PM
1 votes:

Champion of the Sun: Yeah, these require substantial secondary collateral, kinda different this time


This is not new, they have been giving out several 100% home loans with no collateral for the past two years.

/girl in the office just bought a home 100% with nothing but student loan debt.
2013-02-01 03:51:36 PM
1 votes:
FTA:

It's 100% financing-the same strategy that pushed many homeowners into foreclosure during the housing bust. Banks say these loans are safer: They're almost exclusively being offered to clients with sizable assets, and they often require two forms of collateral-the house and a portion of the client's investment portfolio in lieu of a traditional cash down payment.

...Depending on the lender and the borrower, roughly 60% to 80% of the loan can be pegged to the home's value while the remaining 20% to 40% can be secured by investments.


It's not really a no money down loan. It requires secured collateral. Basically if you foreclose now they can take your securitized collateral in addition to the house.

Sure they fund 100% of the cost of the house, but you are putting money down in the form of collateral. Not exactly a great deal. It's actually great for the banks from a risk management perspective, because if the market turns and you can't pay for the house they probably know exactly what you have investment wise and can arbitrage the losses in a down market using the securitized collateral, even if the value of that collateral is going down with the value of the house.
2013-02-01 03:46:29 PM
1 votes:
Hopefully those "and when rates drop further, you can refi again!" commercials come back. Those were great.
2013-02-01 03:34:05 PM
1 votes:
Looks like the government is forcing the banks to give out risky loans again.
 
Displayed 11 of 11 comments

View Voting Results: Smartest and Funniest


This thread is archived, and closed to new comments.

Continue Farking
Submit a Link »






Report