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Bank of America, Wells Fargo, Lehman Brothers, et al. threat

 
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Joined: 14 Jul 2007
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Location: Greater Boston

PostPosted: Tue Nov 13, 2007 4:04 pm GMT    Post subject: Bank of America, Wells Fargo, Lehman Brothers, et al. threat Reply with quote

Use this forum thread to discuss the following link.

Description: Bank of America, Wells Fargo, Lehman Brothers, et al. threatening to pull out of wholesale mortgage-lending market in Massachusetts
URL: http://news.bostonherald.com/business/real_estate/view.bg?articleid=1044325
Info/Broken?: http://www.bostonbubble.com/link_info.php?id=1261

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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Tue Nov 13, 2007 4:14 pm GMT    Post subject: Reply with quote

I'm not buying this. There's a lot of money to be made in the MA real estate market, and it's not like these banks are going to stop offering retail mortgages (i.e., not sold through brokers).

If requiring brokers (a) to not fund mortgages that they reasonable know cannot be repaid by the borrower and (b) to not allow brokers to profit off steering borrowers to higher rates is going to cause these guys to pack their bags and go home, then screw 'em.

I believe that many people simply do not understand a mortgage broker is representing him/herself or the mortgage company for whom they work, rather than the borrower. Where such confusion is likely (inevitable?), I believe laws protecting the consumer/borrower are entirely appropriate.
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john p



Joined: 10 Mar 2006
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PostPosted: Tue Nov 13, 2007 4:43 pm GMT    Post subject: Reply with quote

Banks are predisposed to treating everything like a negotiation. They may have seen Coakley's proposal as an "initial offer". I think they would have protested if she wanted to change the font size on a standard form.

I wonder if the negotiators for the banks now will get a yield spread premium if they can talk Coakley down?

Our society needs to weigh certain things:

First, how do we elevate followership? If people think they can get away with being dumb and expect to be bailed out, our society will have to constantly pay for the clean up of the street pizza when they get hit like on the game "Frogger".

Secondly, we need to institute a "fall safety" approach to protection like OSHA's standards. These are rules for people walking steel etc. For instance, up to 15 feet there are certain guidelines, 15-30 other guidelines, and 30 feet plus full fall protection safety...

http://www.osha.gov/doc/revsteel_erection/revsteel_erection_highlights_script.html

If we allow people to financially walk steel, fall, and splatter, we have to pay for the cleanup. That is wrong.

I believe that the higher you go up the ladder, the more and more professional an industry needs to be. For instance, you will always have sleazy car salesmen. Do you think we should have sleazy fall protetion suppliers? or how about sleazy doctors? The more and more critical a subject is to society, we need to employ a code of conduct, a professional standard, a competence standard and we need to test and rate professionals in order to filter out the sleaze. This industry has gone way too long without a purge of sleaze. I think it is good for our society to say enough is enough and why are we allowing sleazebags to profit so much. It is like we are turning a magnet on for sleazy people and we have to pay to clean up the mess that they create.
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Joined: 14 Jul 2005
Posts: 1807
Location: Greater Boston

PostPosted: Tue Nov 13, 2007 5:57 pm GMT    Post subject: Reply with quote

Bah - the Herald's comment form is broken. I tried to leave the following comment, but the anti-spam captcha isn't showing up, so I'll leave it here:
Quote:

Quote:

YSP had no effect on foreclosures. It allows brokers to offer 0 point and 0 closing costoptions to consumers. Without YSP,only BANKS and "lenders" would be able to do that. Less competition as usual in this State. Is Coakley working a deal with banks just like her predesesor did with the Arch Diocese?

Mr. Colby, the fact that people were able to buy homes without bringing any money to the table certainly sounds to me like it would have led to people buying homes they couldn't really afford and which ultimately ended in foreclosure.


If this is the main reason the brokers are complaining, then I can't muster any sympathy for them. No-money-down schemes are of dubious merit.

- admin
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Tue Nov 13, 2007 6:53 pm GMT    Post subject: Reply with quote

admin wrote:
Bah - the Herald's comment form is broken. I tried to leave the following comment, but the anti-spam captcha isn't showing up, so I'll leave it here:
Quote:

Quote:

YSP had no effect on foreclosures. It allows brokers to offer 0 point and 0 closing costoptions to consumers. Without YSP,only BANKS and "lenders" would be able to do that. Less competition as usual in this State. Is Coakley working a deal with banks just like her predesesor did with the Arch Diocese?

Mr. Colby, the fact that people were able to buy homes without bringing any money to the table certainly sounds to me like it would have led to people buying homes they couldn't really afford and which ultimately ended in foreclosure.


If this is the main reason the brokers are complaining, then I can't muster any sympathy for them. No-money-down schemes are of dubious merit.

- admin


Agreed. I think most banks will let you take out a loan with 5% down plus PMI or a HELOC. If people with no money can't buy homes, isn't that just the way it works?

If you can't scrape together at least some downpayment, that's probably a pretty good indication you shouldn't be purchasing a home. That brokers can no longer take money from people who shouldn't be buying anyway, I can't say I'm terribly sympathetic.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Tue Nov 13, 2007 7:33 pm GMT    Post subject: Reply with quote

If my memory serves me correct, I remember back in 2004, some loan guys telling me that as the rates lowered or the house prices rose after you bought, that you could refinance at the newer higher appraised house value and take the appreciation as equity. I think it was a "grow into your down payment" plan.
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