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(CNN)   It looks like we can add "Basic Facts About Mortgages" underneath "Science" and "Religion" on the list of Things Americans Don't Understand   (money.cnn.com) divider line 87
    More: Fail, Zillow, mortgages, Federal Housing Administration, Consumer Financial Protection Bureau  
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8757 clicks; posted to Main » on 09 May 2013 at 8:05 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-05-09 08:07:40 AM  
4.bp.blogspot.com
 
2013-05-09 08:08:05 AM  
Real estate. The slimiest, vilest, most underhanded and dishonest business there is. I can't think of an "industry" with more middlemen that do less.
 
2013-05-09 08:09:25 AM  
1.  Mortgages are mammals.
2.  Mortgages fight ALL the time.
3.  The purpose of the mortgage is to flip out and kill people.
 
2013-05-09 08:09:26 AM  
Mortgaging just means you flip your property deed card over, right? Then that frees up some capital for those railroads.
 
2013-05-09 08:10:05 AM  
Have you seen a modern mortgage note? Can you honestly expect a home owner to read through and understand that entire thing? I mean if they can, that's great but I would also suggest that same person to take the Bar for their state because chances are high they would pass it.
 
2013-05-09 08:10:24 AM  
LOL, I used to be a sub-prime mortgage loan officer
 
2013-05-09 08:10:49 AM  

Quantum Apostrophe: Real estate. The slimiest, vilest, most underhanded and dishonest business there is. I can't think of an "industry" with more middlemen that do less.


I sell health insurance. Are you saying that I'm less hated than a realtor?
 
2013-05-09 08:12:28 AM  
Wall Street's/bankers'/George Bush's fault.

We done here?
 
2013-05-09 08:12:40 AM  
Modern Finance:
It's worth what the hyper rich say it's worth.
(insert complex, nonsense terminology, random worthless charts and obfuscated symbols here)

It's funny how the 'best and brightest' flock to wall street and make nothing but a huge pile of steaming garbage.
 
2013-05-09 08:12:41 AM  
In all fairness, "APR" is a stupid term that can be different values based on how you calculate it
 
2013-05-09 08:13:18 AM  

IdBeCrazyIf: Have you seen a modern mortgage note? Can you honestly expect a home owner to read through and understand that entire thing? I mean if they can, that's great but I would also suggest that same person to take the Bar for their state because chances are high they would pass it.


=PMT(number of months, rate/12, present value)
 
2013-05-09 08:14:38 AM  

BigBooper: Quantum Apostrophe: Real estate. The slimiest, vilest, most underhanded and dishonest business there is. I can't think of an "industry" with more middlemen that do less.

I sell health insurance. Are you saying that I'm less hated than a realtor?


you forgot the trademark.

it's realtard(tm).
 
2013-05-09 08:15:24 AM  
Well real estate is a mess of local state and fedal laws that both conterdic and over ride each other. And the mortgage notes might as well be written in Aramaic, so obviously they don't understand it.
 
2013-05-09 08:15:26 AM  

Quantum Apostrophe: Real estate. The slimiest, vilest, most underhanded and dishonest business there is. I can't think of an "industry" with more middlemen that do less.


I read that in Alec Guinness's voice.

You will never find a more wretched hive of scum and villainy.
 
2013-05-09 08:15:42 AM  
My dad's a realtor and while I think he has a basic grasp of mortgages, he lacks any understanding whatever of what a revolving line of credit is. Which is funny because he has several credit cards in his pocket right now. "This one still has money on it."
 
2013-05-09 08:17:10 AM  
Don't forget "politics" and "government" subby
 
2013-05-09 08:19:40 AM  
Yes, only Americans are ignorant of these things. I can hear the people in Botswana laughing at us now.
 
2013-05-09 08:20:41 AM  

Voiceofreason01: Don't forget "politics" and "government" subby


Four legs good.  Two legs bad.

That's all anyone has to know.
 
2013-05-09 08:20:58 AM  

BigBooper: Quantum Apostrophe: Real estate. The slimiest, vilest, most underhanded and dishonest business there is. I can't think of an "industry" with more middlemen that do less.

I sell health insurance. Are you saying that I'm less hated than a realtor?


Yes.  Pretty much anyone involved in a RE transaction is a lying SOB.

Hell, I'd even claim that plaintiff's lawyers add more value to society than a 6% Limo Driver.

RE Agent < Tow Truck Driver < Payday Lender < Lawyer < Whole Life Insurance Salesman < Crack Dealer

/haven't given it much thought after that
 
2013-05-09 08:21:13 AM  
I paid cash for my house, so I'm really getting a kick, etc...
 
2013-05-09 08:21:59 AM  

hitlersbrain: Modern Finance:
It's worth what the hyper rich say it's worth.
(insert complex, nonsense terminology, random worthless charts and obfuscated symbols here)

It's funny how the 'best and brightest' flock to wall street and make nothing but a huge pile of steaming garbage.




The best and the brightest have a tendency to figure out how to make the most money with the least amount of actual work? You dont say....

/Intelligence. How does it work?
 
2013-05-09 08:22:10 AM  

GoldSpider: Voiceofreason01: Don't forget "politics" and "government" subby

Four legs good.  Two legs bad.

That's all anyone has to know.


some animals are more equal than others
 
2013-05-09 08:23:53 AM  
What's so difficult about understanding that the bank should give you all the money you want regardless of your ability to pay it back so that you can buy the awesome house you deserve and flip it for 400% what you paid for it every time?
 
2013-05-09 08:24:41 AM  
My wife teaches at a private college. Her students pay $50,000 for a two year degree in a career with a starting wage of about $12.50 an hour. After five year experience, they MIGHT be making $15.00 an hour.

The truth is that student loans are given out to anyone who can sign their name. If the school can line these people up, how hard do you think it is to get these same people to take out a mortgage that they can't afford?
 
2013-05-09 08:25:00 AM  

BigBooper: Quantum Apostrophe: Real estate. The slimiest, vilest, most underhanded and dishonest business there is. I can't think of an "industry" with more middlemen that do less.

I sell health insurance. Are you saying that I'm less hated than a realtor?




Depends... do you make $15,000 for spending 10 hours on my policy?
 
2013-05-09 08:25:35 AM  
One of my friends used to work in the mortgage business... She would tell me stories about the excuses  home owners would tell to not have to pay that month or multiple months "my dog died and i'd like to have two months to recover"
 
2013-05-09 08:26:17 AM  
But seriously, as a condition of our mortgage from our lender we had to go to one of those basic classes and one of the lessons was "make sure you can pay your mortgage AND your utilities". Another friend went to a group one and it was a banker listing all the scams that people getting first-time buyer assistance weren't going to get away with.

It was all really super basic life lesson stuff and we both rolled our eyes but dammit we needed that certificate for the no PMI program.
 
2013-05-09 08:29:15 AM  

BigBooper: I sell health insurance. Are you saying that I'm less hated than a realtor?


Ned Rierson!!?!?!
 
2013-05-09 08:29:30 AM  
It's good that the experts come to fark to have a meeting of the minds.  This is where I learn all the truths about science and the falsehoods of evil religion.  Still on the fence about Fartbango or Obama....
 
2013-05-09 08:30:10 AM  

GORDON: Wall Street's/bankers'/George Bush's fault.

We done here?


You forgot Clinton, Bush I, and Reagan.
 
2013-05-09 08:30:42 AM  
Among the survey's findings, 31% of buyers don't think it's possible to get a mortgage for less than 5% down

I'm not poor. I don't actually give a crap whether or not this is true.
 
2013-05-09 08:30:59 AM  

Thisbymaster: Well real estate is a mess of local state and fedal laws that both conterdic and over ride each other. And the mortgage notes might as well be written in Aramaic, so obviously they don't understand it.


real property law is a high holy thing, however. the premise being that you didn't want the feudal lord to have unlimited ability to take your hut, so laws built up on the issue over time. (we didn't make up law in this country all on our own. the foundations are mostly English, though some states are more continental)

then, in order to protect the people, we have this alphabet soup (i.e. vomit) of disclosures to ensure that people get a pile of lawyer paper that nobody ever reads at the time of a mortgage transaction.

/ in conclusion, shoot the lawyers also
 
2013-05-09 08:34:28 AM  

Quantum Apostrophe: Real estate. The slimiest, vilest, most underhanded and dishonest business there is. I can't think of an "industry" with more middlemen that do less.




Insurance "industry" is 100% middleman. There's no tangible product. At least with real estate there's a building.
 
2013-05-09 08:35:23 AM  

IdBeCrazyIf: Have you seen a modern mortgage note? Can you honestly expect a home owner to read through and understand that entire thing? I mean if they can, that's great but I would also suggest that same person to take the Bar for their state because chances are high they would pass it.


Mortgages are simple.

And my father in law's a mortgage broker.
 
2013-05-09 08:35:57 AM  

GORDON: Wall Street's/bankers'/George Bush's fault.

We done here?


if Dumbya didn't repeal Glass Steagall, terrorists wouldn't have crashed into the empire state building in Boston.
 
2013-05-09 08:37:20 AM  
Alonjar:

The best and the brightest have a tendency to figure out how to make the most money with the least amount of actual work? You dont say....

/Intelligence. How does it work?


It's funny that you confuse "best and brightest" with "obsessed with money".
Contrary to certain perceptions, getting rich is not everyone's priority and not because they are not bright.
 
2013-05-09 08:37:44 AM  

Thisbymaster: Well real estate is a mess of local state and fedal laws that both conterdic and over ride each other. And the mortgage notes might as well be written in Aramaic, so obviously they don't understand it.


Lord, so much THIS. If the States and Feds could just get the laws to agree with each other, it'd be a major improvement. That's not even counting the CFPB boogeyman that banks are scared of, but also refuses to tell them how to comply. It's a guessing game and 'interpretation' of rules with an absentee, passive-aggressive ref.

/works in mortgages
// don't think I'm too slimy
 
2013-05-09 08:39:53 AM  
If you don't understand a mortgage before you sign it, you have a crummy lawyer.
 
2013-05-09 08:41:53 AM  

Generation_D: Insurance "industry" is 100% middleman. There's no tangible product. At least with real estate there's a building.


They're not middlemen, they're bookies. There's a difference.

In real estate, there's a building- but the Realtors and mortgage brokers do nothing but facilitate the transfer of the building. There's not a lot of value-add in those steps. There's a reason it's next to impossible for a "for sale by owner" property to get into MLS.
 
2013-05-09 08:44:20 AM  

IdBeCrazyIf: Have you seen a modern mortgage note? Can you honestly expect a home owner to read through and understand that entire thing? I mean if they can, that's great but I would also suggest that same person to take the Bar for their state because chances are high they would pass it.


If only there were people who were well-versed in the legal speak of such long, lengthy documents and were able to break it down in brass tacks, so that the average schlub could understand them.

I mean, those medical texbooks are huge!  you ever tried to read one and then cut yourself open for some basic surgery?  They should have people who all they do is read the book and do medical thingies and then we can pay them for what they know and do.

Generation_D: Insurance "industry" is 100% middleman. There's no tangible product. At least with real estate there's a building.


Insurance provides protection against risk.  That is the product.  The only thing I can see in regards to my car insurance policy is a small card I keep in the glove box but I know behind that is a service that I am willing to pay for, lest i roll my shiat on the PA turnpike.
 
2013-05-09 08:45:43 AM  

o5iiawah: If only there were people who were well-versed in the legal speak of such long, lengthy documents and were able to break it down in brass tacks, so that the average schlub could understand them.


Ahh yes Lawyers, creating an entirely nothing language for job security.

I hope lawyers and doctors realize that relatively soon, computers and software are going to replace them.
 
2013-05-09 08:47:01 AM  
My dad owns a mortgage company, and I worked in the industry for several years.  Considering that it's the largest purchase most people are ever going to make, you'd think that they would put more effort into finding out what exactly they're paying for.  But, most are just happy that you're giving them money and that they get a house. I was not a fan of working in that industry.

Credit reports, APR, checkbook balancing, and cost of living (ie a budget) should be a class in high school.  Most people have no idea what these things are or how to use them properly.  Of course, that biology class was much more helpful to them than any real world information would be.
 
2013-05-09 08:47:46 AM  

BigBooper: My wife teaches at a private college. Her students pay $50,000 for a two year degree in a career with a starting wage of about $12.50 an hour. After five year experience, they MIGHT be making $15.00 an hour.

The truth is that student loans are given out to anyone who can sign their name. If the school can line these people up, how hard do you think it is to get these same people to take out a mortgage that they can't afford?


Student loans are given to idealistic young people just old enough for a legal signature, with a lifetime to pay them back, and its debt that bankruptcy can't clear. Its the perfect scam.
 
2013-05-09 08:51:31 AM  

IdBeCrazyIf: Ahh yes Lawyers, creating an entirely nothing language for job security.


It's not quite like that. It's what happens when you try and develop a language which is unambiguous, but lack the rigorous mathematical background that's required to do so. The result is a hodge-podge of patches and fixes and wacky interpretations.
 
2013-05-09 08:52:53 AM  
it's as if deadbeats come up with any excuse why they can't pay their bills on time...

/ bankers SUCK!1!
 
2013-05-09 08:55:18 AM  
Having been utter clueless about how the whole thing works, and then deciding to buy a home, and deciding to educate myself, I can tell you that, the fault does not simply fall on the consumers on this.

First off, you dive into a territory of terms that if worded differently would mean something to people. But Google is your friend, and you are willing to spend the time, you can get past those.

The second hardest thing was to get past the myths. The biggest of those myths I find is that mortgage interest saves you money on tax. This one I find the biggest of all lies because it is so close to the truth. First off, you save money only when you itemize. For you to be able to itemize your loan amount has to be above $120K or so. For many, many places you can buy a home for price below that. And the reason for that is, there is also a thing called standard deduction which, for families goes up to $11,400. So, even if you itemize and your deduction becomes say $15K, you are actually saving interest only on $3.6K. Yet people tend to think that they are saving interest on all $15K.

Then there is the opposite myth of negotiating fees. Everyone says you can do that, but I found it extremely hard. None of the companies were willing to change at all until I started a price war between them, and even then, it was minimal.

Then, another myth: refinancing saves you money. In most cases, you basically pay an amount up front to lower your monthly rate. Because, it resets your term to say 30 years again, and at the payment curve is heavily screwed toward paying more interest at the beginning, you may actually not pay less at all (in terms of TOTAL interest paid). Now, effect of that is a big soften by inflation.

/There are many, many more that comes to mind, but I don't think I ever typed a post this long on FARK, so I'll stop.
 
2013-05-09 08:59:15 AM  
>34% don't know what the term "annual percentage rate" (APR) means

I refuse to accept this result as fact.

>Another costly mistake: Many house hunters go shopping with financing in place because it enables them to act more quickly if they see a home they want. But 26% of buyers believe that once they're pre-approved, they're obligated to close the deal with those loans, according to the survey. In reality, there's no obligation. If buyers see better terms available they should take them.

No one goes shopping for the best mortgage rates AFTER finding the house and tendering an offer. That's putting the cart before the horse. The whole point of the pre-approval is to pull the trigger with the seller quickly. But that's like step 8 while shopping the rates is step 1. To not use it and continue shopping when the right place is found is like scrapping everything you've done and starting all over again. Sure you COULD do it, but why the hell would you want to?
 
2013-05-09 09:00:17 AM  

mayIFark: The biggest of those myths I find is that mortgage interest saves you money on tax. This one I find the biggest of all lies because it is so close to the truth. First off, you save money only when you itemize.


And let's not forget: you're paying less tax,  but you're paying interest to the bank. In the end, you're not actually saving anything. I did a 15 year loan, and by the second year, the mortgage interest was so little that we wouldn't have itemized if not for a few big charity donations.
 
2013-05-09 09:00:36 AM  

mayIFark: The second hardest thing was to get past the myths.


Real estate is fueled by myth. Did you ever see a condo development being sold on facts? It's usually loud music and hot chicks and brochures.

They want you to know as little as possible.
 
2013-05-09 09:04:46 AM  

xxmedium: The whole point of the pre-approval is to pull the trigger with the seller quickly. But that's like step 8 while shopping the rates is step 1.


When I did it, I got a preapproval just to show the buyer that I had means and that we would be able to close. I don't even remember which lender did the preapproval- I wasn't paying attention much at that point because I didn't start rate shopping until later in the process. I had a fairly unusual home buying process, though. I wasn't actually looking at the time. Just sort of walked into a house and decided to buy it.
 
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