Regulators To Issue Mortgage Warning

Wash Post ^ | 4/07/2006 | Kirstin Downey

[ex-Texan]

Bank Chief Seeks to Rein In Risky Deals

As the real estate market slows, some mortgage lenders are trying to prop up profits by relaxing lending standards for certain types of loans, endangering borrowers and financial institutions, a top banking regulator said yesterday.

Speaking to the New York Bankers Association, John M. Reich, director of the Office of Thrift Supervision, warned that some lenders are making it too easy for unsophisticated borrowers to take on risky nontraditional mortgages that they may not fully understand. * * *

But a regulatory crackdown on the loans, known as interest-only and option mortgages, could prove problematic for some pricey real estate markets, such as the Washington area, where buyers have become increasingly dependent on such loans.

About two-thirds of all people who bought homes in the Washington area in 2005 used interest-only or option mortgages, many of which have adjustable interest rates, up from 2.2 percent in 2000 * * *

Local mortgage brokers say borrowers are taking out these loans because it is the only way they can afford to buy a home today. * * *

"Without these products, homes couldn't be purchased. If they are taken off the market, it could precipitate a disaster of epic proportions." * * *

These new loans are risky for some borrowers, said Thomas Shaner, executive director of the Maryland Association of Mortgage Brokers, but their use has fueled the local real estate market.

"If people suddenly can't get an interest-only loan because the feds are clamping down on how many are out there, it'll drive the market down,"

[Petronski]

In effect, P. got some of his buddies to gang up on me today.

You just can't stop lying, nor can you stop talking about other posters without pinging them.

It's because your position is not defensible, and you thus feel the need to sneak about, telling your lies.

That's your way, and it's certainly well-understood now.

[New Girl]

"Some may not like the truth you post through reputable newspapers (even if they are left leaning). Even right leaning papers are saying the SAME things. My best guess is that they are sweating it out with THEIR interest ONLY loans on houses they can't afford and don't want it rubbed in their faces. If you looked under their chairs ... I'd bet you'd see HUGE brown spots as they sweat it out."

Sorry, but you're late on the draw. We don't have a problem with Ex-Texan posting articles at all - that is what the forum is for. The problem is that he posts a link to his own blog every single time he posts.

And for the record, I own multiple properties all with 30-YEAR FIXED MORTGAGES. No worries here at all.

[Mini-14]

So NewsPundit is his blog? If so, I like it.

[nmh]

"Sorry, but you're late on the draw. We don't have a problem with Ex-Texan posting articles at all - that is what the forum is for. The problem is that he posts a link to his own blog every single time he posts. "

"And for the record, I own multiple properties all with 30-YEAR FIXED MORTGAGES. No worries here at all."

I'm not "late on the draw".

I've never read his blog. I focus on the articles.

No need to be defensive. We prefer no mortgages and at most 10 year on our properties. We're watching prices drop and anticipating a few more properties. That is one reason why I pay attention to this topic.

[nmh]

"Sorry, but you're late on the draw. We don't have a problem with Ex-Texan posting articles at all - that is what the forum is for. The problem is that he posts a link to his own blog every single time he posts. "

"And for the record, I own multiple properties all with 30-YEAR FIXED MORTGAGES. No worries here at all."

I'm not "late on the draw".

I've never read his blog. I focus on the articles.

No need to be defensive. We prefer no mortgages and at most 10 year on our properties. We're watching prices drop and anticipating a few more properties. That is one reason why I pay attention to this topic.

Correction:

15 year mortgages with no penalties paying it off sooner. Typically they are paid off in 10 years.

Social Security and 401K's aren't going to give us the lifestyle we want when we retire so we are working on that now through real estate rentals and other investment properties.