How much of the mortage crisis was caused by pure speculation

[Jayford]

Quote from stock_trad3r:

The title is misleading. NO crisis where I live. Houses keep going up with plenty of demand.

True, in many areas. Texas, for the most part, is appreciating as an example. They never had a bubble though, except maybe in Austin.

This thread, and most of the articles you read, refer to the bubble markets generally speaking. However, these bubble markets ARE having an adverse effect on the entire nation.

BTW, cover story in today's (3/10) USA Today is about people just walking from homes. It discusses people not even trying to avoid foreclosure by restructuring, and those that don't even need to go through foreclosure, but choose to. If they think it will be many years to recoup the 30% loss they have, why not live rent free for a year, get booted, and then rent for much less than owning. Then you fix your credit and buy something several years out.

 

[CFMTrader]

Quote from OldTrader:

Hate to disrupt anyone's agenda here, but I guess you know that the only folks that got 0% loans were homeowners, not "investors", "flippers" etc. A non-owner occupant could not get a 0 down type of loan.

OldTrader

OldTrader ...

I have to disagree. What I have read is that at least some of the flippers stated during the loan process that they planned to live in the home. Of course by stating they planned to live in the house then they were able to get 100% financing at a lower rate then an investor.

Lets see ... they applied for "lair loans" by claiming incredible income levels ... but of course they were compeletely honest about the purpose for the loan.

Dishonest borrowers working with unethical lenders ... sending the whole mess towards greedy and ignorant investors. And We the People will probably have to pay to fix it.

CFM Trader

 

[overspool]

They also did them as second homes, which in terms of risk to an U/W is generally the same as owner occ.

 

[ratboy88]

Quote from OldTurd:

Hate to disrupt anyone's agenda here, but I guess you know that the only folks that got 0% loans were homeowners, not "investors", "flippers" etc. A non-owner occupant could not get a 0 down type of loan.

OldDufus

yeah.. no one ever lied on a mortgage application. ask casey serin. illegal immigrant strawberry pickers got a 700,000 loan. can you say BUBBLE?

 

[OldTrader]

Quote from CFMTrader:

OldTrader ...

I have to disagree. What I have read is that at least some of the flippers stated during the loan process that they planned to live in the home. Of course by stating they planned to live in the house then they were able to get 100% financing at a lower rate then an investor.

Lets see ... they applied for "lair loans" by claiming incredible income levels ... but of course they were compeletely honest about the purpose for the loan.

Dishonest borrowers working with unethical lenders ... sending the whole mess towards greedy and ignorant investors. And We the People will probably have to pay to fix it.

CFM Trader

Certainly there was fraud around. No question there. But if the buyer already owned a home, it's pretty hard to make the case that he is going to be an owner occupant unless that loan is paid off. Do it more than once and it becomes very hard.

The 2nd home thing was more viable. And I'm not as familiar with that particular tactic. But I don't think 100% financing was available to second home buyer's. Correct me if I'm wrong.

I'm not questioning that there was alot of fraud around. I'm just questioning whether this is all due to "flippers". I think alot of this revolves around borrowers who never should have been able to buy a house. No money down. Poor credit. And no income verification. That's a prescription for disaster. And the folks that got these types of loans weren't "flippers".

OldTrader

 

[ElCubano]

how about the guys who re-fi'd their homes to the hilt in order to put a deposit on 5 condos which they are now upside down on all the way around...even if they walked away from their deposit most are left with a home which they are now upside down on...I know of many of these situations down here...peace

 

[ratboy88]

Quote from OldTrader:


I'm not questioning that there was alot of fraud around. I'm just questioning whether this is all due to "flippers". I think alot of this revolves around borrowers who never should have been able to buy a house. No money down. Poor credit. And no income verification. That's a prescription for disaster. And the folks that got these types of loans weren't "flippers".

OldTrader

this doesn't happen without a willing fed. this was all planned. but what do i know...

 

[Specterx]

All financial bubbles are caused by speculation...

Anyone who tried to flip multiple properties etc. will be deep in the red. If they walk away, well, that's their right, and of course it should be. The penalty is loss of your down payment, loss of past payments on the mortgage, and getting your credit trashed. If professional mortgage companies were stupid enough to offer loans with 0 down (i.e. basically zero risk for the borrower) and stupid enough to take on clients who could never repay the loans, then they deserve whatever they get. Big lenders screw little borrowers all the time, it's fantastic to see the tables being turned for once.

Did somebody actually suggest we make it illegal to default on a mortgage? Like we need to use the State to protect and coddle the poor poor Wall Street financiers? I think Countrywide etc. can damn well look after themselves.

 

[crackedback]

Quote from OldTrader:

Hate to disrupt anyone's agenda here, but I guess you know that the only folks that got 0% loans were homeowners, not "investors", "flippers" etc. A non-owner occupant could not get a 0 down type of loan.

OldTrader

ROTFLMAO at this one.

My old landlord had 4, yes FOUR, owner occupied homes purchased in a 2 year period.

In CA all the flippers were nailing 100% financing or as some I know of 80/15/5 owner occupied loans.. and the 5% was borrowed as well.

 

[OldTrader]

Quote from crackedback:

ROTFLMAO at this one.

My old landlord had 4, yes FOUR, owner occupied homes purchased in a 2 year period.

In CA all the flippers were nailing 100% financing or as some I know of 80/15/5 owner occupied loans.. and the 5% was borrowed as well.

I doubt if your landlord had 4 owner occupied homes. Did you actually see these loan documents? Or did your landlord "tell" you this. I guess you understand there's a certain amount of fish story in all of this...but maybe you're a guy who believes anything.

80/15/5....where the 5% was borrowed where? Not at the lender my friend. Maybe on a credit card? Other credit line.

Any way, have a good time ROFLMAO off. You're easily amused. While you were ROFL, you missed the point of the thread.

OldTrader