Posted on 07/15/2002 9:25:42 AM PDT by AdamSelene235
Except for Jun-Aug, not So hot, not So humid. Even seen Houston or Dallas?
And then these credit bandits get pissed off when you turn them down and demand to know why!
I had one guy who kept bitching, why am i being turned down? I want to know!
After a while I couldnt take it any more. I said to him, I am sure visa, mastercard, ford motor credit, duke hospital (and a couple other creditors) would like to know why you havent been paying them.
I had a lady with over $35,000 in collections and charge offs get real mad at me for denying her app to purchase a home. I went pretty easy on her considering how big of an idiot she is, but I let her have it.
The real scary people are the ones who want to finance 100% of the purchase price, roll in closing costs and also include their student loans, credit cards, car loans, etc... in their purchase mortgage.
Idiots.
I would bet that not one of their Directors could give a lucid description of a "swap," a "floater" or an "inverse floater."
Sadly, these instruments are potentially lethal in the wrong interest rate environment and could, in time, bring down the whole mortgage lending economy. Too many of them depend upon counterparty credit worthiness and when one major counterparty goes south, it tends to have a domino effect on entire industries.
The underlying problem is that we have a lot of young, hotshot derivatives traders whose compensation is based on trading performance and a lot of senior management types who don't have the foggiest idea of the amount of risk they are piling on.
This next one could make the current accounting flap look like a walk in the park.
While this piece has some flaws, it is mostly right on the money.
Being long Fannie or Freddie might not be a great place to be in the next few months.
VERY funny! LOL!
I do know what you mean though. I attribute it the "era of entitlement" propogated in the 90's and unfortunately still going on to a large extent today. It may be our downfall.
By the way, do you use LP? It is much more debt ratio friendly and will give approvals with no PITI reserves.
How much of this debt is secured by liens on real property (mortgages)?
This is precisely the problem. The debt is backed by mortgages whose value is dependent upon the liquidity that Fannie Mae created with debt, backed by mortgages to create more liquidity to drive home values higher which increases the amount of debt they can use to create liquidity.
The cycle works both ways.
The debt is "secured" with derivatives. The market is not large enough to absorb the shock of something going wrong with those derivatives.
A derivative is only as "secure" as the other party's ability to pay.
So the loans are not secured by real estate? FannieMae's loans are not secured by real estate?
Ah, yes, I should sacrifice.
First off, I should quit paying rent on the apartment. I won't need it - I'll be buying a house!
Secondly, I guess I could stand to lose a few pounds, so, I can quit buying food.
Thirdly, since I'll be spending all my time at my workplace while I'm saving, I won't need to pay car payments.
I can't get out of paying off grad school loans. I spent years in filthy, substandard student housing while getting an education.
You know what? Even if I saved every penny I earn after taxes, it'll still take me about two years to save k$30.
Sacrifice? Hah. The young are priced right out of owning a home. It's now only for the elderly, or the inherited wealthy, or the dot.com scammers. You know why there aren't many stay-at-home parents? Because if one stayed at home, that home would be a cardboard box beside the freeway!
Yes, because we are describing the circular reasoning of the GSE bubble.
FannieMae's loans are not secured by real estate?
No, they are secured by real estate but complete the sentence: Fannie Mae's debts are secured by real estate,whose value is dependent on Fannie Mae pumping money into real estate.
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