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America's Debt = "We're Screwed!" (pg. 3)
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| Fir3start3r |
| quote: | Originally posted by occrider
Do you know the statistical trend in debt payments as a measure of disposable income? That was my singular question and it would eliminate all conjecture on the matter. I suppose I could try to look it up but I'm lazy :p. |
That would be interesting....get on it!!
I was up to my eyeballs in a VISA card and government tax payments once.
Took almost a year of accelerated payments to get rid of them both (both totaled approx. 12K).
It's all over with now but man that sucked large. :sadgreen:
Now I collect those payments as extra downpayment towards a nice condo in the area :)
My advice, bite the bullet, accelerate the payments on your debts while saving a bit on the side.
Consumer debt. is bad mmm'kay? |
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| jesteraver |
Just to bad your government can not take over certain large corporations like Exxon and who else makes huge profits a year.
To bad not everyone can pay $60,000 at once to pay off the huge amount of debt. |
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| jesteraver |
One way... seeing there is about 8.3 million millionaires that live in the USA now.
Have them pay $240,000, and give them a nice tax break for 4 years.
8,300,000 x 240,000$ = 2,988,000,000,000$
Plus have some corporations give the rest of the 6,000,000,000,000$.
Start of at 0$ debt. |
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| juzfugen |
| quote: | Originally posted by zookeeper
. We are seeing individuals purchasing large homes, of which they are not qualified, taking on 30 year and now even 40 year "interest only" monster loans, with disturbing regularity.
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Really? Well then help me out see Im a mortgage broker and have been for the past 7 years and I come across people everyday who dont qualifiy for loans. so if you can point me in the the direction of these lenders who loan out money to people who dont qualify it would really help me out.
Now on a serious note, neg am loans arent for everyone and Ive rarely suggested them to any of my clients, it really depends on the situation. Brokers who pushed these loans on first time home buyers inorder to close a deal due to the debt to income ratio should be shot, but if it was for an individual/couple who knew for a fact they werent staying there too long( who pay interest on an asset that is appreciating at that rate if you will cash out before rates become an issue), or if they knew their income was going to significantly increase in the next few years (IE medical residents).
Another problem is people have been using thier homes as ATM cashing out as much equity as they can, while rates have been at an all time low they are just furthering true ownership.
Buying a home is the single largest investment a person makes and if their mortage broker isnt looking at their loan from this perspective they need to find a new loan consultant. |
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| Shakka |
| quote: | Originally posted by juzfugen
Really? Well then help me out see Im a mortgage broker and have been for the past 7 years and I come across people everyday who dont qualifiy for loans. so if you can point me in the the direction of these lenders who loan out money to people who dont qualify it would really help me out. |
Well then, you're clearly biased!;)
Some of the riskiest loans have been financed on the lower end of the credit spectrum. People with deeply sub-700 FICO's getting high LTV loans with little or nothing down. It's certainly not every issuer, but it's probably more pervasive than you give credit for. I'm wary of New Century, Firstfed Financial and Novastar Financial in particular. I'm also wary of Corus Bancshares among others simply because of their huge exposure to the Florida condo/condoflipping market. But a company like Golden West which is more conservative with their loans and boasting a much lower loss ratio (even though they are purely exposed to the outrageous California market) is probably less guilty/susceptible, imo. There are banks that have engaged heavily in low-documentation/no-documentation loans as well, which is just stupid, imho. Anyhoo... |
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| juzfugen |
You say I'm biased, I say I know whats actually going on versus someone who read an article in Forbes magizine, I deal with this everyday.
rofl sub 700 ficos... you realize thats 80% of america, look Im 33 years old I did auto finance for BMW and Lexus 6 years and now Im in the mortgage industry and sub 700 is NOT bad or risky whatsoever.
Risky is near 620-630 but you also have to actually look at their report and see why its low, is it debt to income or is it late/slow pays.
I bet you didnt know that if you have never max out your cards and pay off your credit cards every month your fico score goes down. Lenders are in this business to make money and if you pay off every month they dont make interest they penelize you by lowering your rating.
The higher the LTV the better the persons credit has to be, no doc/low doc loans have been around since before you were born and are extremely difficult to get approved for those should be the least of your worries. The people who got into neg am loans and didnt refinance once rates started going will either be selling their homes VERY soon or getting forclosed on but this wont be a prevailent issue because the majority of neg am loans were issued in cali and florida because of the crazy market they have had over the past 4 years. This effect will help foster a slow down in the housing market due to the influx of home availibilty and current over building taking place. While most Americans rack up debt, home ownership is the last real bastion of tax relief they have.
Yes this country has a problem with keeping up with Jones but dont place too much into an article you read about defaulting home loans.
As for the companies you mentioned, if youre uncomfortable with them then dont invest in them, thast the only reason I can think of you brining them up...
And for each lenders guidlines, ALL A paper lenders guidlines are pretty much verbatum of each other, youll have slight fluctuations but this market has become so competitive in the last 5 years they all offer the same loan, the same guidlines and it boils down to funding time and customer service |
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| Shakka |
| quote: | Originally posted by juzfugen
You say I'm biased, I say I know whats actually going on versus someone who read an article in Forbes magizine, I deal with this everyday.
rofl sub 700 ficos... you realize thats 80% of america, look Im 33 years old I did auto finance for BMW and Lexus 6 years and now Im in the mortgage industry and sub 700 is NOT bad or risky whatsoever.
Risky is near 620-630 but you also have to actually look at their report and see why its low, is it debt to income or is it late/slow pays.
I bet you didnt know that if you have never max out your cards and pay off your credit cards every month your fico score goes down. Lenders are in this business to make money and if you pay off every month they dont make interest they penelize you by lowering your rating.
The higher the LTV the better the persons credit has to be, no doc/low doc loans have been around since before you were born and are extremely difficult to get approved for those should be the least of your worries. The people who got into neg am loans and didnt refinance once rates started going will either be selling their homes VERY soon or getting forclosed on but this wont be a prevailent issue because the majority of neg am loans were issued in cali and florida because of the crazy market they have had over the past 4 years. This effect will help foster a slow down in the housing market due to the influx of home availibilty and current over building taking place. While most Americans rack up debt, home ownership is the last real bastion of tax relief they have.
Yes this country has a problem with keeping up with Jones but dont place too much into an article you read about defaulting home loans.
As for the companies you mentioned, if youre uncomfortable with them then dont invest in them, thast the only reason I can think of you brining them up...
And for each lenders guidlines, ALL A paper lenders guidlines are pretty much verbatum of each other, youll have slight fluctuations but this market has become so competitive in the last 5 years they all offer the same loan, the same guidlines and it boils down to funding time and customer service |
Like I said, you're biased. Your job is on the line and you're defending your industry. Nothing wrong with that. The facts are the facts. Just because you "actually know what's going on" doesn't mean you're not biased. I'm sure you've done quite well for yourself in the last few years since you made the switch to the mortgage industry.
I am biased too, but I also try to see the facts and the data for what they are. That's why my hedge fund has made a substantial amount of money shorting risky mortgage finance companies and homebuilders (FBC, FMT, DRL, SAX, IMH, etc, etc, etc...). Did you know that WalMart wants to enter the banking industry and that H&R Block has been in the mortgage business for several years? Everybody wants a piece. It's a frenzy if not a bubble.
And with the economy on already shaky footing with all time record levels of consumer debt, I'd think twice before hastily giving out the next loan just to keep your sales numbers growing. It's a fact that more and more people have been buying speculative second and third homes for investment, flipping condos as prices rose, hoping to pass off the liability to an even bigger fool, profiting on the mania. It's no secret that record low interest rates have been the major fuel to the homebuying fire. And it's no secret that somebody ultimately will be left holding the bag. Rates have gone back up and are still rising. Alls I'm sayin' is you might want to be careful before waving your home team flags and doing your next touchdown dance. |
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| zookeeper |
| quote: | Originally posted by occrider
Well I'm afraid you're taking extremes in the sub-prime market and trying to apply it across the entire mortgage industry. |
Yeah, perhaps I "over-did-it" :clown: (a member of my extended family has been a target for predatory lenders lately...so that explains that)
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I'm not sure this trend is as pervasive as you imply.
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From my perspective, and I'm not sure on the rest of the country, NY is a welfare state (only CA is ahead of us) and it tends to bring loan sharks, for lack of a better term. I do hope it's different in the rest of the country.
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disposable income?
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Living in the area you do, you must have some! :haha: |
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| zookeeper |
| quote: | Originally posted by Shakka
And with the economy on already shaky footing with all time record levels of consumer debt, I'd think twice before hastily giving out the next loan just to keep your sales numbers growing. |
The entire point exactly, of this thread, imo. |
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| occrider |
| quote: | Originally posted by zookeeper
Living in the area you do, you must have some! :haha: |
My debt to disposable income ratio? Yea it's huge. I can't afford to buy a parking lot in dupont circle. ;) |
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| juzfugen |
| quote: | Originally posted by Shakka
Like I said, you're biased. Your job is on the line and you're defending your industry. Nothing wrong with that. The facts are the facts. Just because you "actually know what's going on" doesn't mean you're not biased. I'm sure you've done quite well for yourself in the last few years since you made the switch to the mortgage industry.
I am biased too, but I also try to see the facts and the data for what they are. That's why my hedge fund has made a substantial amount of money shorting risky mortgage finance companies and homebuilders (FBC, FMT, DRL, SAX, IMH, etc, etc, etc...). Did you know that WalMart wants to enter the banking industry and that H&R Block has been in the mortgage business for several years? Everybody wants a piece. It's a frenzy if not a bubble. |
/sigh ignorance is bliss I guess..
First off my job is not online, my famaily owns this business and has for 30+ years and TBH I really dont have to work a day in my life but I went that route through my early 20's and found myself quite bored with life. People are ALWAYS going to buy house and the vast majority of them will never be able to pay cash for them so my industry or my job arent going anywhere.
You seem to have some misconception that loan officer/mortgage brokers actually have any say on whenther or not a loan gets approved, sorry to burst your bubble but we dont. So your little snide comments can stop right there it clear youre uneducated on this subject matter. There are guidlines set by the secondary market we have to follow, I take youve never heard of underwriters..
You have to make a certain amount of money
You have to show job stability minimum 2 years at the same place
Your debt to income can not exceede 36%(this includes the proposed p&i payment)
You have to show cash reserves anywhere from 4 to 6 months and it can not be gifted.
And your credit score has meet guidelines ( this is going to dictate your rate)
If you have less then steller credit yes you can get a loan but you will have to pony up a minimum of 20% of the purchase price plus closing cost. On a 200k house that 40k down plus closing which will be 7k plus reserves which is roughly another 5k. How many people with bad credit do you know who can gather up 50k+ in cash to purchase a house? Not too many, if they had that kind of cash their credit wouldnt be that bad, you can adjust the purchase price to whatever area but the formula wont change.
So you run a hedgefund? :haha:
by your ignorance on this subject, I'll think I'll pass on investing.
Glad to see you've read the front page of just about every financial magazine and newspaper for the last years stating how rates are going up and housing will start slowing down, good job on those shorts I think I hear Gordon Gecko knocking on your door.:rolleyes:
What does Walmart getting in the financial field have to do with any of this and yes I knew about it, it was announced over a year ago. But let me return the favor, did you know Target,GM and Nordstrom along with atleast half a dozen other wll known companies are banks, thrift charters and run ILCS? What effect does any of this have on the mortgage business......... NOTHING! H&R Block along with EVERY MAJOR financial institution is in the mortgage business, Chase (ala JP Morgan), Merryl Lynch, Goldman Sachs.
Stop with this did you know bull ok I already told you Ive been in finance in one form or another for damn near 14 years and you arent impressing anyone
| quote: | Originally posted by Shakka
And with the economy on already shaky footing with all time record levels of consumer debt, I'd think twice before hastily giving out the next loan just to keep your sales numbers growing. It's a fact that more and more people have been buying speculative second and third homes for investment, flipping condos as prices rose, hoping to pass off the liability to an even bigger fool, profiting on the mania. It's no secret that record low interest rates have been the major fuel to the homebuying fire. And it's no secret that somebody ultimately will be left holding the bag. Rates have gone back up and are still rising. Alls I'm sayin' is you might want to be careful before waving your home team flags and doing your next touchdown dance. |
How is the economy on shaky footing, debt is high doesnt = shaky economy. I cant give out loans to who ever I want the business doesnt work that way.
No one flipped properties in hopes of passing off liabilities, they were flipped for profit, what you call mania is the samething that happened in the 90's with the tech boom. Every decade there is a flourishing industry that get heavily invested in - tech, oil, realestate, and money. Heres a little hint for ya real estate ALWAYS appreciates.
Why are you repeating "its a known fact blah blah blah" no joke its known, any fool waiting inline at the grocery store can repeat everything you posted about just by glancing at the magazine covers. |
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| zookeeper |
| quote: | Originally posted by juzfugen
famaily owns this business and has for 30+ years and TBH I really dont have to work a day in my life but I went that route through my early 20's and found myself quite bored with life.
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Sorry, no sympathy for you here.:sadgreen:
Pssst!....proofreading....it's a good thing;)
| quote: | Originally posted by juzfugen
Heres a little hint for ya real estate ALWAYS appreciates.
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NO! NO! NO! NO! NO! NO! NO! NO! NO! NO!
For example, south of Buffalo NY, anyone remember a piece of real estate named LOVE CANAL! A wonderful neighborhood development, full of promise, high home values and TOXIC WASTE! A total financial loss for all parties involved.
North Syracuse NY, a community that was thriving and property values high, Carrier Corporation went into the toilet and now people are selling 2500sq ft. homes for pennies on the purchase dollar.
Auburn NY, the military installation called Seneca Army Depot is closed (thanks, Bill....head:rolleyes: ) and, once again, values now.... ****sound of a flush****
I think the word we are looking for is "usually" or "sometimes" appreciates in value. Real estate investment is not as "safe" as it once was. |
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