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Thread: Freddie Mac. Betting against home owners.

  1. #71
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    Re: Freddie Mac. Betting against home owners.

    The bank makes a knowingly risky loan for 300K in an inflated market. The home owner ends up losing the home two years later and the home is not valued at 200K. The bank liquidates it for 80% FMV = 160K
    They are out 140K. They file a claim on the PMI insurance that went with the loan and recoupe the loss. This is what is happening frequently now and threatening to collapse the economy further. It is also part of the reason it is now so difficult to get a home loan. PMI companies are taking this catastrophe on the chin. It is why the fed is talking about more QE
    to prop up the housing market. Most of the QE won't go to banks. It will go to PMI companies. This is strictly my opinion based on the high numbers of investigations going on now. Investigators are going through original loan applications in an attempt to find nefarious activity, or numbers which should have raised a red flag, yet did not. Other offenders in the quagmire are loan modification scams which did indeed trigger a high percentage of foreclosures. In some cases, even the big banks themselves had a hand in the outcome of foreclosure by telling home owners to pay a lesser amount monthly while the
    modification process was being done. Eventually, telling the home owners they failed to modify the loan, and informing the home owners they now owed all the back short payments & penalties.
    Banks, concerned greatly on the stability of PMI companies future, had motivation to help push home owners into foreclosure
    sooner rather than later. The investigations in progress now are intended to find what should have been cause for concern on the original loan, the intent being that the PMI company can deny the claim, and or negotiate a lower settlement on the claim. The entire situation, all of it, goes back to greed on behalf of the banks, brokers, and people who knowingly took out loans they probably could not afford long term, naively believing home prices would continue rising rapidly indefinately.
    I'm not an expert on this. And maybe I am off base here. But much of the above is fact in regard to the PMI claims and current investigations underway.

    Regards

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by apdst View Post
    That's right. It's being discussed. No one is going to issue a loan, that may be in violation of the law later down the line.

    Something that is in the bill and isn't being discussed, is the ban on high risk loans. By now, alot of people have crappy credit scores, especially if they're fixing to get foreclosed on.

    Will Mandate for 20% Down Hurt Homebuyers? - TheStreet
    Nonsense. I'm a Realtor. My clients with good credit scores are getting financing with 10% down all the time. If that passes, big if, there is absolutely no way on God's green earth it would be retroactive.
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by lizzie View Post
    We werenít in extraordinary times when these people bought these homes. Look, I do feel bad for a lot of peeps who bought houses who were caught up in the fury, and bought houses because they thought they could make a killing on them in the market. That being said, people with bad credit were being foolish and signing contracts for really insane financing terms, against their better judgement. This was a great failure of government and financial institutions, but people who have bad credit need to take a look at what they are signing up for. They were suckered into a disaster of their own making.

    I did not favor the bailouts of the banking industry and the auto makers AT ALL. I opposed vehemently letting bad businesses succeed. I would rather have bailed out homeowners than businesses by a long shot. That being said, our government needs big businesses much more than it needs homeowners. We have already taken on much more federal debt than we can afford.



    Donít point your finger at me and the rest of us who did not support anything that was happening in DC when all the **** hit the fan. We could see it coming for several years leading up to it. Point your finger at lawmakers who thought social engineering was an appropriate business model for success, lawmakers who implicitly supported all the bull**** that happened by holding financing institutions hostage with FDIC status.

    No sane business would ever have given credit to the non-credit-worthy without an implied guarantee by our government that it would be taken care of.
    We're all implicitly responsible, though. We all live here, we all pay the taxes, we all FUND this machine.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

  4. #74
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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by MaggieD View Post
    Nonsense. I'm a Realtor. My clients with good credit scores are getting financing with 10% down all the time. If that passes, big if, there is absolutely no way on God's green earth it would be retroactive.
    Well, my credit scores range in the high 700s, and Bank of America wanted 20% down, said it was mandatory. Why Bank of America? Because I've been a customer of their for years, and I wanted to get around having to go the FHA rout because of the difficulty finding a ready to move in house, in CT, in my price range.

    Sorry about you being a Realtor. I know it's hard times for you guys right now.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by KevinKohler View Post
    Well, my credit scores range in the high 700s, and Bank of America wanted 20% down, said it was mandatory. Why Bank of America? Because I've been a customer of their for years, and I wanted to get around having to go the FHA rout because of the difficulty finding a ready to move in house, in CT, in my price range.

    Sorry about you being a Realtor. I know it's hard times for you guys right now.
    My daughter bought a house earlier in the year with nothing down. I'm sure her score isn't a high as yours.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by 1Perry View Post
    My daughter bought a house earlier in the year with nothing down. I'm sure her score isn't a high as yours.
    Maybe this new mandate only applies to the major banks, and not smaller mortgage companies? Also of note, this was over 2 years ago, heck more like 3-4 years ago, that I got this news from BofA.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by KevinKohler View Post
    Maybe this new mandate only applies to the major banks, and not smaller mortgage companies? Also of note, this was over 2 years ago, heck more like 3-4 years ago, that I got this news from BofA.
    There is no requirement as in a law. It might have been BoA's at the time.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by 1Perry View Post
    There is no requirement as in a law. It might have been BoA's at the time.
    The loan agent I spoke to said it was a federal mandate.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by KevinKohler View Post
    The loan agent I spoke to said it was a federal mandate.
    Well it was BoA.

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