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View Diary: The Stock Market is Not Crazy and the Republicans are Toast (210 comments)

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  •   Appraisals are going flat out nuts (1+ / 0-)
    Recommended by:
    Vespertine

    again, and I can tell you from first hand experience that multiple banks have been eager to loan my wife and I 50% more than we could reasonably pay the note on.

    We're not sub-prime borrowers, but even a short period of unemployment with what they're offering would end in foreclosure if we were dumb enough to take it.

    Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

    by JesseCW on Wed May 01, 2013 at 03:12:03 AM PDT

    [ Parent ]

    •  That is interesting (1+ / 0-)
      Recommended by:
      artmartin

      but I don't think the US has the same degree of carelessness as that which led to the massive subprime abuse.  I'm not saying all brokers are going to scrupulously follow all regs but there are some clearly defined limits.  And I also am not saying consumers should disregard the first rule, "buyer beware".  But at least there is a new place to go for guidance if consumers are willing to do a little homework for their own self interest.

      ... the new Consumer Financial Protection Bureau issued regulations spelling out how lenders must ensure that borrowers can repay their loans.  Banks that follow the criteria would be protected from most lawsuits.  To meet the standard of a qualified mortgage, a bank would have to verify the borrower's income, employment and total debt, which could not be more than 43 percent of his or her income.

      The criteria also would prohibit subprime loans, teaser low-rate mortgages with balloon payments later, interest-only mortgages, and fees of more than 3 percent.

      I just closed on Friday for a refi and while I've talked to many eager bankers, I found the process to be much tighter than the refi we did a few years ago.  And every broker was openly discussing how the process had been tightened for them.  I also found that unlike years ago, the range of offered interest rates was a much tighter number range this time.  I think perhaps fewer brokers are willing to do teaser rates.  Obviously this is a narrow experience in my area of suburban Chicago and doesn't represent the huge mortgage industry.  I don't think the process is just tighter enough that some of those marginal situations won't get mortgages quite as  easily.

      As for the other layers of the process that contributed toward the collapse: the bundling, the credit rating entities, etc - I'm not sure what is  happening there.

      I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

      by Satya1 on Wed May 01, 2013 at 07:59:58 AM PDT

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      •  That lenders are less insanely reckless than they (0+ / 0-)

        were six or seven years ago does not mean that they are not insanely reckless.

        They're lending at prices that likely cannot be sustained when interest rates eventually increase again.

        This isn't about "buyer beware", it's about the contention that lending practices which hand out mortgages that will go into default if even one of the borrowers on the note losses a job for even a few months are somehow insurance against another major crash.

        They're not.  Moving from "completely insane" to "really stupid" isn't a reason to start feeling secure.

        Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

        by JesseCW on Wed May 01, 2013 at 11:03:45 AM PDT

        [ Parent ]

      •  Jesse will always (1+ / 0-)
        Recommended by:
        Satya1

        take the sky is falling side to any issue and insinuate that everyone involved is corrupt.  Your breath isn't wasted though.  I've very much appreciated your input.

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