Disqus - Latest Comments for rjcarrillo

Re: Houses passes mortgage bill

rcarrillo — Sat, 26 Jul 2008 00:40:35 -0000

I have a client that has suggested just this action. He can not refinance his curreny 6.75% fixed rate (because where rates are now, his savings would not be worth the costs). He hears people are getting lower rates because they are behind, so he mentioned ruining his 750 score and excellent payment history to force the bank to lower his payment.

They can make the current payment, but they prefer a lower one and say they are willing to do it. I advised strongly about the potential issues as credit will be ruined and the lender might not negotiate in the end.... or even foreclose. But I am sure that some out there will try this.

Re: Another (large) nail in the coffin – Wachovia closes wholesale

rcarrillo — Sat, 26 Jul 2008 00:27:06 -0000

Mikew- Not only was their fraud at all levels, but banks are the ones that set the rules by which brokers had to work. The bank sets the guidelines and hires, trains and supervises the underwriters that approve these loans. They gave away "free money" at ridiculous standards, brokers just sold them (irresponsibly in some cases).

Dwight - In some states, like NC, brokers need to have background checks, credit reports, take a class and exam. While I feel the requirements could still be higher, bank loan officers (like Wachovia ones) are exempt from even these regulations... they are in no database and the state has 0 knowledge of who they are. Brokers have far higher standards to enter the industry and remain there.

Of course there are bad brokers that commit fraud. There are also lenders that do the same.

Speaking of "sane and honest lending practices" ignores that Wachovia sought out and purchased one of the largest Option ARM lenders there was. They advertised their happy, dancing people about the "Pick-a-Pay" Option ARM until 2 months ago.... well past when warnings were clear that these programs were sold by their loan officers inappropriately. Plenty of reports showed how their own loan officers were given incentives to sell this product to anyone that would call. Now they have to pay the price for that business decision.

Re: Fifth Third Makes Wholesale Changes

rcarrillo — Sun, 30 Mar 2008 22:06:26 -0000

As LG said. I am disappointed that programs meant to help average homebuyers are becoming harder to find.

Stated income 100% financing or 100% for those with damaged credit was of course a bad idea. The point of My Community, like FHA, was to help homebuyers that had decent but not great qualifications buy with affordable financing. It is hard for first time homebuyers or those with low to moderate income to save 5-10% down. Many have excellent credit, debt-to-income and savings history... but that first rung on the homeownership ladder can still be out of their reach.

I think if more brokers and lenders had encouraged programs like FHA and My Community over the last few years instead of 100% reduced doc loans for all.... we would not be in the mess we are now. Unfortunately, this is another case of everyone having to pay for the irresponsibility of a few.