Re: Update on youwalkaway.com
Posted by Paul on September 29, 2008 at 14:00:32:
In Reply to: Re: Update on youwalkaway.com
Posted by jim on September 29, 2008 at 13:20:42: You're correct about Citigroup! The question is how can they afford to take over Wachovia???
In terms of Casino play vs. buying a home. You bet you can borrow money from you credit cards and place bets in Vegas all day long. You can play until your funds run out or you win big time!
How many bought homes with ZERO dollars down! MANY! It wasn't their money. The govenment also made 125% of value loans. Yes, they gave you money at close to fix the homes.
Many in CA. in regards to new homes divisions, they purchased only to catch the wave of future appreciation. Gone now!
The banks made the loans knowing they could bundle the loans and sell them on the secondary market. Everyone was in on the deal! It was all about the movement of money!
Why on earth should a Broker selling a loan to Bob with a FICO score of 720 earn $1500 on a $300,000 loan. Yet earn maybe $6,000 for the same loan to Carl who has a score of 600? With all things being equal, paper work the application etc? What's up with that???
Carl and Bob could be friends buying homes next to each other.
So where does morality start? At the coonception of the loan? Or after you've closed the deal? Should Banks and Brokers have the same moral standards?
The DOW closed down -777.68 as of this writing! What does that say???
The question is why can't some people afford the home? Was it their fault or the lenders fault! Were they sold something they didn't understand or were other factors involved circumstances? Is it possible lenders abandoned safe conservative lending practices in an effort to generate more revenue, propping up their stock and bottomline.
Go around and ask people if they ahve an adj mortgage. Ask them do they know their Index, margin, rate. Most don't what you're talking about.
These products are so sophisticated many real estate agents don't under a start rate, margin, Index, etc.
This is far beyond people failing to pay. A few people failing to pay isn't pulling down the market and causing the collapse of the banks.
Take note. When ALT A loans, and Jumbo loans start to default as did subprime, what's going to happen then???
Its going to get interesting!
Follow Ups:
- Re: Update on youwalkaway.com - jim 23:33:00 09/29/08
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