Mortgage fraud. - Page 5

Wagner · #41 08-26-2008, 08:31 PM

See your quote.

Quote:

Originally Posted by Quicksilver

Ok Wagner;
Please explain how the solutions you offered will stop the three things listed in this article?

#1 The most common type of fraud that MARI found pertained to employment history and income. Many applications exaggerated how much borrowers earned and misrepresented their job descriptions.

Lenders can jockey this info just as much as the applicant. I've seen lenders attempt to alter job titles or time worked to account for this. I've even witnessed lenders calling HR departments and asking them to massage the title.

#2 The biggest increase came from a jump in the number of undisclosed or incorrectly reported debts, liens and judgments.

See your answer to question one. At no time did the article say the applicant themselves lied, but more so the overall paperwork was misleading.

#3 Most fraud involves average home buyers whose lending officers feel compelled to tweak their applications. But some involves criminal enterprises.

Ahh, self explanatory..the lenders fault.

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Wagner · #42 08-26-2008, 08:33 PM

Quote:

Originally Posted by B-Line

Yes, I read it. And while I don't agree with the criminal activity of some lenders and brokers, I still don't see how that correlates to the risk of homeownership being transfered to the bank.

And, if the bank does assume any losses, than shouldn't they be able to dictate when and if you CAN sell at that time.

Real Estate always bounces back. If you sell now or did some stupid financing, you may get crushed. But if you hold on long term, you'll see a return on investment..

Hmm, how to answer this. The risk is of the value, not home ownership. That line seems to keep getting blurred in this thread.

I'm pretty sure any bank hopes that if you sell your home you make enough to cover the loan

So lets see, with this logic, the alternative to having lenders be accountable to the customer they granted a loan to, based on the value they set for the asset..we'd rather have government bail outs.

blondboinsd · #43 08-26-2008, 08:37 PM

I guess I'm wondering what happened to people actually understanding the value will come back AND where did this country go? Last housing downturn people valued their debts and stayed with what they purchased and hunkered down thus making it much less of a painful drawn out end of the world type thing

This is what I really am shocked with, but beyond this everyone shares blame for being greedy and the banks should be more willing to negotiate vs taking a 50% hit on a REO

I've been looking In Rolling Hills Ranch, a master planned upscale community in Chula Visita, I looked at 5 homes, all over 3800sq ft, all sold for 1.2-1.5mil in 2006 (development from 2006) now their in the high 6's to low to mid 7's, BIG drop

FSETH · #44 08-26-2008, 08:46 PM

Quote:

Originally Posted by Wagner

Hmm, how to answer this. The risk is of the value, not home ownership. That line seems to keep getting blurred in this thread.

I'm pretty sure any bank hopes that if you sell your home you make enough to cover the loan

So lets see, with this logic, the alternative to having lenders be accountable to the customer they granted a loan to, based on the value they set for the asset..we'd rather have government bail outs.

Home ownership includes many risks and expenses. Values are just one aspect. With home ownership comes many costs and question marks such as insurance (flood, hazard, fire, etc.), maintenance costs, interest, taxes, and appreciation or depreciation. Plus the whole liquidity issue that it may take you a while to sell your home if you need to get out of it.

Nobody is forcing anyone to blindly buy property, use their homes equity as an ATM machine, buy more house than they can afford, or get ARM mortgages. The people who choose to do these things are really the ones to blame.

Just curious, but how can you expect a bank to eat the costs if there is a decline in your homes value, but not have any cut of future profits?

Wagner · #45 08-26-2008, 08:47 PM

Quote:

Originally Posted by FSETH

Home ownership includes many risks and expenses. Values are just one aspect. With home ownership comes many costs and question marks such as insurance (flood, hazard, fire, etc.), maintenance costs, interest, taxes, and appreciation or depreciation.

Nobody is forcing anyone to blindly buy property, use their homes equity as an ATM machine, buy more house than they can afford, or get ARM mortgages. The people who choose to do these things are really the ones to blame.

Just curious, but how can you expect a bank to eat the costs if there is a decline in your homes value, but not have any cut of future profits?

The bank sells the loan (hence the sub-prime crisis on Wallstreet). It isn't as if the bank just holds on to it an hope the interest they collect is enough

They single handedly overstate the value of their portfolio to make money...which is fine, but then don't turn to the government when the costs don't go the way you expected.

FSETH · #46 08-26-2008, 08:53 PM

Quote:

Originally Posted by Wagner

The bank sells the loan (hence the sub-prime crisis on Wallstreet). It isn't as if the bank just holds on to it an hope the interest they collect is enough

They single handedly overstate the value of their portfolio to make money...which is fine, but then don't turn to the government when the costs don't go the way you expected.

Yes, in many cases they do package and sell these loans and it is completely wrong to inflate the portfolios value when doing so. That is sort of a different issue than the bank guaranteeing the price of your home.

The other problem is that most of these sub-prime loans should have never been made in the first place, but that is not all the fault of the bank. As Quicksilver said, many buyers falsified documents or simply used no-doc stated income loans and lied about how much they made. Once again, a lot of blame falls back on the buyers.

Wagner · #47 08-26-2008, 08:59 PM

Quote:

Originally Posted by FSETH

Yes, in many cases they do package and sell these loans and it is completely wrong to inflate the portfolios value when doing so. That is sort of a different issue than the bank guaranteeing the price of your home.

The other problem is that most of these sub-prime loans should have never been made in the first place, but that is not all the fault of the bank. As Quicksilver said, many buyers falsified documents or simply used no-doc stated income loans and lied about how much they made. Once again, a lot of blame falls back on the buyers.

Well we just disagree on the topic. It is in the banks best interest to inflate documentation, inflate home values and turn and burn on the open market. How is the bank NOT responsible for that action?

Quicksilver · #48 08-26-2008, 09:02 PM

Sorry but in my view doing what you suggest won't help a bit.

Quote:

Originally Posted by Wagner

See your quote.

Wagner · #49 08-26-2008, 09:03 PM

Quote:

Originally Posted by Quicksilver

Sorry but in my view doing what you suggest won't help a bit.

Why not?

FSETH · #50 08-26-2008, 09:09 PM

Quote:

Originally Posted by Wagner

Well we just disagree on the topic. It is in the banks best interest to inflate documentation, inflate home values and turn and burn on the open market. How is the bank NOT responsible for that action?

Agree to disagree.

I personally think that the lending industry is responsible for a portion of what has happened to the housing industry, but I also feel that the buyers are just as responsible, if not more so. People are going to try to sell anything. It is the buyers responsibility to understand what they are buying and what responsibilities come with ownership of that item. Especially an item of this magnitude. As I said before, a talk with an agent would clear up a lot of things for someone who is clueless.

I just don't see how the banks being responsible for any possible depreciation would help things. Most likely it would only raise the rate that you and I pay in order to compensate for their losses.

How can anyone guarantee that any certain property is only going to appreciate? It is just not possible. There are just too many variables.

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