One falls...another one rises. It’s how it works.
Banks are not going to want to be in the mortgage business with 0% down negative amortization loans to people who can't provide paystubs on houses with fictional appraisals.
Maybe we'll get back to sanity with 10% or 20% down on mortgages with required principal payments.
Somewhere I heard rumblings about something Bill Clinton did in 1996 that directly effects the Sub Prime fiasco of today, yet I read nothing about what he allegedly did.
I don’t generally follow these situations as it isn’t my expertise (eyes glaze over), but I remember what I read, so if anybody can enlighten, it would be appreciated.
When my mortgage got sold twice to two different banks within the two months after closing, somehow my escrow disappeared. What happened was they used it as a payment during the time when the loan was sold. (I had sent a payment to the first lender as I hadn’t received the notice it was sold AGAIN yet.) So, imagine my joy a few months later when I found out that my property taxes weren’t paid! So after much nagging, I got the bank to pay them because they are responsible for the payment. But now I have been paying almost double in escrow payments because someone screwed up! What got me mad wasn’t so much that they screwed up but that no one would tell me where the $1600 went! I could have just bit the bullet and made the tax payment myself and not dealt with the bank at all... but they had to stretch it out almost two years!
I think the banks deserve to go under.
20 months ago I took out my 30 year fixed. I worked with my bank, I had a big down payment to avoid PMI, and I did a lot of work to get what I wanted. Meanwhile a pair of idiots I am unfortunate to know called the 800 number on a TV ad, got a loan, and called me an idiot for putting anything down since there where so many ways to make money in real estate with no money down. No these idiots are in a crunch and are positive the congress will bail them out. Maybe I am the idiot for trying to do the right thing.
He is incorrect. Maybe banks who are not doing a good job will choose to not be in the business.
Banks with well run, adequately capitalized mortgage operations will do fine.
The lenders who have been diligent with their underwriting and product offerings are seeing that pay off right now.
and in a vain attempt to ‘cover’ their losses, CapOne changed their fixed interest rates (8.9%) on there long time excellent credit score ccard members to a variable starting at 13.9% (only one late in 18 years - forgot to mail it). I paid the balance off immediately and closed the account.